Monetary policy

Will the Swiss drive up gold prices?

If you are a gold bug, and if you think the majority of the Swiss are too, you might want to consider adding some of the yellow stuff to your portfolio. But be careful – even in Switzerland, referenda can result in surprises, and not every opinion poll that glitters is gold. [...]

The sublime irony of Draghi’s dilemma

With all of Europe’s woes, the ECB now looks like the last institution able to move the continent’s economy. But even the ECB cannot achieve what Europe really needs to make it viable in the long run: painful but effective economic reforms. [...]

There’s only one cure for the eurozone’s terminal disease

Euro periphery countries should have the courage to rid themselves off the shackles of an ill-designed currency union that they should have never joined in the first place. What do they have to lose? [...]

The calm before the eurozone storm

The next stages of the euro crisis are already programmed into the system. It is just a matter of time until the current period of calm ends. And though it is impossible to when we can expect the next euro storm, one thing we can say with certainty: The euro crisis is not over. Far from it. [...]

A new legal challenge to the ECB’s mandate

The two ECB flagship projects of saving the euro and saving Europe’s banks are now both under legal threat. Sometimes “whatever it takes” is not enough if you cannot convince top judges as well. [...]

Do market fundamentals still matter?

In an ideal world, an economic liberal like myself would happily enter a debate supporting the moot that it is financial fundamentals driving investment markets. But it is not an ideal world, neither for economic liberals nor for investment markets. [...]

Behind the ECB’s smoke-and-mirror show

What we are seeing now is a continent barely held together by the monetary alchemy of its central bank. But you have to hand it to the ECB: it has developed extraordinary skills in concealing the real nature of its actions. No other central bank could so beautifully camouflage subsidies to banks and governments as help to the private sector. [...]

Labour’s monetary upgrade

Those who believe they can neatly choose between higher unemployment and higher inflation, typically end up with both. Labour does not seem to be aware that policies which will drive down the exchange rate and boost employment can even have a price level effect. [...]

‘Whatever it takes’ is not the whole story

What may look like the euro’s strength is not quite what it seems. The eurozone remains as fragmented as ever, and neither Draghi’s words nor any real actions of his central bank will make a difference to this basic problem. The only way to tackle it would be a departure of some members from monetary union. [...]

Time for a rethink on monetary policy

For the past forty-odd years, since the US’ final departure from the Bretton Woods system and the last remnants of the link between the US dollar and gold, we have indulged in the idea that the old definition of money no longer mattered. We thought we could just declare what ought to count as money. The signs that this system of monetary ruthlessness and lawlessness has run its course are overwhelming. A world that cannot bear the thought of a return to normal is a case in point. [...]