27 Jul 2016
26 Jul 2016
The Royal Bank of Scotland has warned customers that they may be charged to deposit money if the Bank of England cuts the base rate.
With the solvency of the banking system in question, why would you deposit your life savings in a bank if you are going to be charged for the privilege? It ...
25 Jul 2016
In three decades China has developed from a poor inward rural economy to a global manufacturing powerhouse. There is no doubt the 21st century will belong to China and at the heart of their ambitions is economic development along the historic silk road.
22 Jul 2016
Since the 2008 economic crisis global debt levels have exploded. America’s debt to GDP ratio stands at 103%, Japan 240% and Italy 170%. When you take into account unfunded liabilities such as government pensions, the figures are many times worse. In reality there is no chance these debts will ever be repaid. Politicians tell us we are in an era of austerity, yet deficits keep rising. The political class hope we will grow our way out of the problem, but growth is yet to materialise
Since 2008 $60 trillion of debt has been added pushing the worldwide debt load to ...
21 Jul 2016
Earlier this week the IMF and European commission both lowered their growth forecasts for the UK economy. The decision to exit the European Union has “thrown a spanner in the works” of the global economy according to the IMF. They now believe the British economy will grow by an anemic 1.3% in 2017.
As the economy grinds to a halt this forecast looks optimistic. It now appears more likely we are heading into another recession. Despite leaving rates unchanged in July the Bank of England is widely expected to slash rates when the Open Market Committee meets next ...
19 Jul 2016
The success of a country can be measured by the size and productivity of its middle class. In Britain today, middle income working families are being labelled the “new poor” by the UK’s leading think tank the Institute for Fiscal Studies.
Two out of every three children living in poverty have at least one parent working. The gap between Britain’s poorest households and those on middle income is at its lowest level for 20 years.
The young are suffering the most, with incomes for the under 25’s still languishing at pre-2008 levels. Whilst the over 60’s have experienced a 11% ...
18 Jul 2016
The gold price retreated during Asian trading as safe haven demand for the yellow metal waned after a failed Turkish military coup.
The U.S. dollar has been the main benefactor as investors reversed safe haven trades with calm beginning to return to Istanbul and Ankara. In retaliation, President Erdogan ordered the arrest of 6,000 people he believes organised the coup against his government. The gold price fell 2% last week, its first weekly decline in seven weeks.
In other news, better than expected U.S. retail sales clearly got traders to start contemplating the Fed may actually raise interest rates this year. ...
14 Jul 2016
After eight years of zero interest rates and endless rounds of money printing, central banks are now openly discussing so-called helicopter money. Helicopter money is where money is pumped directly into the economy and not through the banking system.
The Japanese central bank could be the first to pull the trigger. After printing trillions of Yen, the economy is still experiencing low growth and deflation. With options running out the Bank of Japan may be forced to literally hand money out to the Japanese population. Expectations are rising that the Bank of Japan is poised to unleash a ...
13 Jul 2016
Following three difficult years for the yellow metal the first six months of 2016 have seen gold surge 28%, its best first half return since 1974.
According to analysts from Credit Suisse and UBS the rally has only just begun. In the short term analysts from both banks are expecting the price to reach $1,400 per ounce. The surge is being spurred on by economic uncertainty, loose monetary policy and anaemic yields on government and corporate paper.
Following the UK’s decision to exit the EU institutional money has flooded into government debt, pushing yields to all-time lows. For the first time in ...
12 Jul 2016
Concerns over the health of the Italian banking sector is starting to spook the financial markets. Figures suggest 17% of all loans issued by Italian banks have gone bad, which is equivalent to £300bn.
Market volatility following Brexit has hit the sector hard. A perfect storm of low growth, political instability, corruption and low interest rates is undermining the banking sector.
The political elite in Brussels are opposed to an EU bailout, instead they prefer shareholders and junior bondholders to take a haircut. This will not be politically acceptable in as most of the junior bonds have been sold to ...
11 Jul 2016
The European banking system needs a €150 billion bailout according to Deutsche Bank's chief economist, David Folkerts-Landau.
According to Folkerts-Landau, Europe is extremely sick and must deal with its structural problems now or there is going to be a financial accident.
In the aftermath of
Ironically the crisis has ...
07 Jul 2016
Deutsche Bank is Europe’s largest bank and according to the International Monetary Fund (IMF) the world’s most dangerous bank. If Deutsche Bank fails it has the potential to collapse the global financial system. So should we be worried?
Deutsche Bank’s share price has collapsed by over 50% in the last 12 months and now trades at 30 year lows. In simplest terms you can value a banks worth by measuring the difference between the bank’s assets and its liabilities. This currently stands at 60bn euros which is not a lot when you consider the sheer size of Deutsche Bank loan ...
05 Jul 2016
City experts are expecting the Bank of England to slash interest rates within weeks as the UK economy grids to a halt. Many will blame Brexit, however, economic data indicates that the British economy was stalling in the weeks leading up to the referendum.
Economists believe that Mark Carney will be forced to cut rates to 0.25% in an attempt to maintain confidence the UK economy. In the immediate aftermath of Brexit Carney and Chancellor Osborne both hinted that they would be prepared to reduce interest rates and reintroduce quantitative easing. The pound fell to a new ...