Financial Markets

Thorsten Polleit (TP): On November 5, 2024, Donald J. Trump was elected the new US president with a landslide victory.

On New Year’s Eve 1974, President Gerald Ford snuck in an executive order legalizing private gold ownership, revoking FDR’s previous policies banning gold “hoarding.”

President-Elect Trump has been threatening tariffs against BRICS countries unless they abandon their plans to abandon the US dollar. While Trump may come off as being "tough" in his negotiations, he cannot bluster his way to a stronger dollar, thanks to reckless monetary policies.

Commercial real estate in the US faces major problems despite efforts by the Federal Reserve System to prop it up. Bonds used to finance commercial real estate markets are being hit especially hard, and there is no relief in sight.

Thanks to the Fed's balance sheet and the Fed's policy on reverse repurchase agreements, it's hard to tell whether the Fed is being hawkish or dovish. 

For nearly 30 years, the Fed has pursued an easy-money policy that has made the economy increasingly dependent upon the next round of “stimulus.” Reversing that policy will mean, at least in the short run, a stiff recession before the economy rebounds, which is a non-starter today.

As the Federal Reserve engineers one financial bubble after another, we are reminded that the Austrian Business Cycle Theory explains what is happening and how there is a better way. 

The First World War was critical to boosting the influence of that child of progressivism and Wall Street corporatism: the Federal Reserve System. 

Commercial real estate in the US faces major problems despite efforts by the Federal Reserve System to prop it up. Bonds used to finance commercial real estate markets are being hit especially hard, and there is no relief in sight.

Contra Marx, the laws of economics are immutable and are the same no matter what historical epoch exists. Economies cannot flourish unless market prices, private property rights, and profits and losses are unhampered.