In this report, I cover the early market action from London on Tuesday, August 20th, 2019. I look briefly at the precious metals, the stock market, the dollar, the bond market and the price of Brent and WTI crude oil.
Today I reference Professor Antal Fekete's essay entitled "The Counterproductive Monetary Policy of the Fed" to try and explain to the viewers why falling interest rates and the policy of Quantitative Easing has the opposite effect that is supposed to have.
We have been told by the mainstream economic profession and Central Bankers that falling interest rates and more money printing will help the economy but in effect, all that this policy does is drive up bond prices and benefit the speculators or as they are called today the hedge fund managers.
Professor Fekete explains how the creditors or buyers benefit from higher bond prices but he shows how it hurts the creditors that issue that debt and how this mechanism squeezes the terms of trade for the labour market as producers are constantly looking to cut costs through issuing new and cheaper capital.
My conclusion is that nothing good will come out of the current monetary policy of not only the Federal Reserve but all the other major Central Banks like the ECB, the Bank of England and the Bank of Japan.
"The Counterproductive Monetary Policy of the Fed": http://professorfekete.com/articles/AEFCounterProdMonetaryPolFed.pdf
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Thanks again, for the economics class, Maneco64. I am leaning toward Silver and a very little Litecoin & Etherium.