Financial Markets

Sweden launched its failed negative rate plan almost five years ago and now reverses it due to the financial risks that are created.

It's possible for investors and entrepreneurs to make a lot of money in markets without understanding the economic theory behind their actions.

Dr. Bob Murphy introduces an upcoming e-book on the mechanics of the Fed.

"I am not saying that fiat money, once established on the ruins of gold, cannot then continue indefinitely on its own. Unfortunately … if fiat money could not continue indefinitely, I would not have to come here to plead for its abolition."

As long as there is still room for pushing the market interest rate down even further, the chances are reasonably good that the boom continues, and that the bust will be postponed into the future.

When operating in an easy money regime, finding investments capable of providing reasonable returns becomes difficult to near impossible. Low risk vehicles are bid down to near-zero returns, pushing investors into ever riskier vehicles to generate enough return to cover objectives.

The Fed overestimated the robustness of the economy, underestimated the level of addiction of the markets to cheap money, and it was way too quick to proclaim a “full recovery” from the crisis.

While some governments have sought to wage war against cryptocurrencies, Switzerland is striving to become a "crypto-nation." 

A new banking crisis is not only in the making, for which the repo problem serves as an early warning, but it could escalate quite rapidly.