February 22, 2018

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Economic strategies distorted by political priorities

John Maynard Keynes

Both sides of this debate support the need for structural reforms, but Keynesians argue that austerity makes them more difficult to achieve. For instance, if you wish to liberalize the labour market, the initial consequence is likely to be higher unemployment. You need to cushion that through state benefits until the delayed greater efficiency produced by reforms comes through. [Read more…]

Contained Depression

How to Break Out of “Contained Depression”

great depression

The well-known American economist Larry Summers recently caused a stir when he told an International Monetary Fund research conference that there will be no easy return to pre-crisis normality in the advanced economies. [Read more…]

High-Risk Products

Banks High Risk

Banks Love to Sell These High-Risk Products By Michael Zuber

A longstanding reader of On Target recently received an investment promotion from the private client wealth management branch of one of the world’s largest, best-known and most prestigious banks. It offered a mouth-watering annual yield of 18 per cent. [Read more…]

High Costs for Poor Returns

Investing

I recently received a plea from a lady living in Thailand to warn people against a well-known locally-based financial adviser to expats for “locking clients into long-term investment products promising high returns, but in actuality delivering low returns and high fees.” [Read more…]

How You Can Best the Professionals

trading game

You don’t have to be a professional fund manager to make good profits on the stockmarket.

Over several decades of advising people in South Africa how to invest, I told them: “You could do very much better than the professionals, because you don’t have to follow the crowd timidly to avoid criticism of mistakes, and you can invest in small companies which funds tend to avoid.” [Read more…]

Risk of an Attack of Nerves

Wall Street

Wall Street

April is the month when stock markets usually fall out of bed, starting major corrections that last sometimes till just July, other times dragging on into the foothills of Christmas. [Read more…]

Just a matter of time

 

Currency Reserves

Currency Reserves

There are reasons why major nations haven’t done this yet. But the probability is that they will be driven into doing so in time, as global economic growth remains sluggish, governments fail to implement the radical reforms needed to kick-start higher growth, annual borrowings required to finance fiscal deficits stay high, and the private sector becomes increasingly unwilling to lend money to governments at derisory rates of interest. [Read more…]

Profligate money creation in Europe

European Central Bank - Mario Draghi

European Central Bank – Mario Draghi

Japan’s central bank is under pressure from the newly-elected government to step up its easy-money policies. [Read more…]

Gold Readies for Another Upsurge

Gold Surge

The gold price seems to have been slowly but relentlessly sliding since it peaked at $1,920 in September 2011. This has been the strongest of the four corrections in the soaring bull market that began 12 years ago, with a fall of about 13 per cent. [Read more…]

Thirst for Gold

Gold stocks

Gold stocks

According to Tyler Durden, writing in Zero Hedge, analysis suggests that China is buying almost 1,000 tons of gold a year and is well on the way to achieving the target admitted by a State Council adviser in December 2009 of 6,000 tons in foreign reserves within three to five years, and perhaps 8,000 to 10,000 in eight to ten years. [Read more…]