Axel Merk
@AxelMerk
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Founder/CEO, Merk Investments. $2.5bn in gold & miners. Weekend rancher. tweets ≠ advice
USA
Joined June 2012
In 1971, Nixon "temporarily" closed gold window. In 2008, central banks "temporarily" went into crisis mode. I'm temporarily skeptical it will all end well.
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Incidentally, Charles Plosser, the former Philly Fed President who recently passed, worked constructively to get the Fed out of the business of doing things its ill equipped to do.
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If we don't get Warsh as the next Fed chair, expect more of the same. That's not a good thing because the increased politicization of the Fed is but one of the consequences of the Fed ever more encroaching on fiscal turf by veering from its monetary policy focus.
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The new policy review framework is already water under the bridge. What matters is what the next Fed chair will do. And there, only one candidate so far stands out as someone with an interest in true reform, Kevin Warsh.
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The policy framework review is a committee driven process to fine tune a report, a bit like drafting the next FOMC statement. It's an exercise, then put on the shelf. It's a missed opportunity to truly improve decision making at the Fed.
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Powell discusses new policy framework -- he does so as a lame duck Fed chair, so take that for what it's worth. Basically, backward inflation targeting is out, but he "clarifies" that inflation may run above the target without causing alarm. Clear as mud.
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Granted, the word “may” is used, so I suppose there’s room to backpedal. But when every FOMC member’s dog knows that forward guidance is dead and buried, why bother with it at all?.
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I just notice that my praise of Ursula von der Leyen's communication got exactly 0 likes. I'm no fan of much of EU policy, but when praise it due, I'll mention it. If in doubt, remember you get what you pay for when you follow me, so cherish it.
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Milton Friedman = framework.Bill Buckley = messaging.Ronald Reagan = execution.@p_m_robinson’s world 👇.
“Bill Buckley makes conservatism accessible. He explains it, he makes it cool. Milton Friedman establishes the intellectual foundation. And then @RonaldReagan is the one who puts it into practice in electoral politics” @P_M_Robinson to @MaxRaskin
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Details of the "deal" aside, you've got to give credit to @vonderleyen for communicating directly. Gone are the days where EU bureaucrats talk only behind closed doors and consider public communication something to be shunned.
Today’s EU-US Joint Statement secures the best possible terms for EU companies and consumers:. ➡️ the EU is the only partner worldwide with an all-inclusive tariff ceiling .➡️ exclusive guarantee on tariff limit for pharmaceutical and semiconductors sectors .➡️ all-inclusive 15%.
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Despite a hawkish tone, the FOMC Minutes were a snooze fest in the markets. Why?. Serious question. Has the market moved on? Are they waiting for Powell to speak on Friday?.
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It's not surprising - I point it out because this is supposed to be the 5 year review. Remember, the backward looking inflation averaging is still the official policy on the books. And, no thorough evaluation of the Fed's failure to prevent Great Inflation II has been published.
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The FOMC Minutes are a place to look for clues on how the strategy review is going. Except, um, there's no update on the reaction function, communications framework, or other specific changes.
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Former Philly Fed President Charles Plosser has passed, per Bloomberg. Charlie will be missed—as a wonderful human and principled policymaker. Even as his health declined, he constructively engaged. I last saw him in May at Hoover’s Monetary Conference. RIP.
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FWIW, in Switzerland, taxes vary by town. Geneva is a high tax place, so flight from there is not all that surprising. Italy, in contrast, has become a tax haven under certain circumstances. Separately, as the article points out, there's an initiative for a stiff federal.
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Oh Switzerland! Bankers flee Geneva to Italy save on taxes. What has the world come to? Well, you gotta love competition.
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