By Bud Conrad, Casey Research

The Federal Reserve recently announced important policy changes after its Federal Open Market Committee (FOMC) meeting. Here are the three most important takeaways, in its own words:

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John Taylor, the CEO and Chairman of FX Concepts, the world’s largest currency hedge fund, announced that no trader has any purpose betting in favor of the dollar anymore. “Everyone is sure whenever the dollar looks strong, Bernanke will come up with another idea to make it weak,” Taylor said following last week’s announcement by the Federal Reserve to keep interest rates at 0% until 2014. In addition, Taylor predicts QE3, a third balance sheet expansion program by the Fed, will come to fruition sometime in the near future and will do even more damage to the dollar. Read the rest of this entry »

Bill Gross, the famed bond manager who runs the world’s largest fund at PIMCO gave some sobering insights in a recent CNBC interview. Read the rest of this entry »

Last week, in a matter of less than 7 days, the Federal Reserve led by Chairman Ben Bernanke purchased a net of more than $20 billion in new assets. Despite the fact the Fed is now only supposed to be implementing Operation Twist (a move to sell short term Treasuries in exchange for long term ones) and a reinvestment program (the funneling of maturing mortgage-backed securities into Treasuries), the nation’s central bank is quietly embarking on a major quantitative easing program many were expecting would be accompanied by a grandiose announcement. Read the rest of this entry »

Following declines in European stocks, US equities opened lower today and have extended losses as the day progresses. The Dow, NASDAQ, and S&P 500 are all down more than -2%. Gold has been dragged down into the sell off, likely the result of traders using the metal’s strong liquidity and past performance to acquire cash, falling below $1,700/oz. The only asset on the rise today is Treasury prices and risk-off currencies like dollars, a predictable outcome of a risk sell off as investors flee assets and by necessity enter cash-like products.

Today’s sell off is the culmination of last week’s economic releases, the congressional super-committee’s failures and deterioration in Europe’s financial woes. Let’s review these factors: Read the rest of this entry »

From Cato:

Featuring Rep. Ron Paul (R-TX), Chairman, House Financial Services Subcommittee on Domestic Monetary Policy; James Grant, Editor, Grant’s Interest Rate Observer; Jeffrey M. Lacker, President, Federal Reserve Bank of Richmond; Robert Zoellick, President, World Bank; Allan Meltzer, University Professor of Economics, Carnegie-Mellon University, and Distinguished Visiting Scholar, Hoover Institution; Judy Shelton, Author, Money Meltdown; Benn Steil, Director of International Economics, Council on Foreign Relations; John Allison, Former Chairman and CEO, BB&T, and Distinguished Professor of Practice, Wake Forest University.

CATO’S 29th ANNUAL MONETARY CONFERENCE — MONETARY REFORM IN THE WAKE OF CRISIS — will address the fundamental issue of how to prevent another global financial crisis — not by tinkering with the present government discretionary fiat money regime but by fundamental reform. The first step is to rethink the role of government and central banks in the existing system, and then consider alternatives — such as the gold standard — that would substitute rules for discretion, increase choice in currency, and allow markets to determine the optimal quantity of money. After nearly a century of U.S. central banking, it’s time to reconsider whether the Federal Reserve’s monopoly status, discretion, and growing regulatory powers are more a source of crisis than a cure.

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Famed commodity bull and Quantum fund co-founder Jim Rogers discusses his up to date investment views on Europe, the US and the gold with CNN.

Key points from Rogers’ interview: Read the rest of this entry »

Jim Grant, editor of Grant’s Interest Rate Observer and Ron Paul’s choice for Federal Reserve Chairman, gives an excellent interview for Bloomberg news (see bottom of post). Grant is a favourite economic commentator of ours and is one of the few market watchers who accurately focuses on the solvency and credit worthiness of the public sector. We’ve discussed the excessive leverage the Federal Reserve has taken on in the past, but have had difficulty finding anyone else who has taken notice. Save Jim Grant, who has extended the leverage and solvency analysis to the European Central Bank (ECB) which he concludes is insolvent. This echoes similar comments from John Brynjolfsson made not long ago. Read the rest of this entry »

Texas Congressmen, Presidential hopeful, and Chairman of the House domestic monetary policy subcommittee, Ron Paul, appeared on CNBC’s ‘Closing Bell’ today (video at the bottom of this post) to discuss his presidential bid, the economy, gold and the dollar. Read the rest of this entry »

Today Federal Reserve Chairman Ben Bernanke spoke following the release of the FOMC statement which indicated no change in current policy. Bernanke outlined the Fed’s economic projections and took questions from reporters. Read the rest of this entry »