The last time Americans were given a "new form of money," the country abandoned the convertibility of dollars into gold, and the value of the fiat dollar has declined ever since. You can see on the chart below that the dollar is a pittance of its former value. Now, the world's central bankers are looking toward the adoption of another "new form of money"—central bank digital currencies (CBDCs). Agustín Carstens, the head of the Bank for International Settlements (a.k.a. the BIS, often called the central bank of central banks), wants to introduce CBDCs as "these new forms of money will … [Read more...]

Savvy investors are gobbling up these yields. Because you don’t need to compound big numbers to have big success. To double your money, you could do it with T-bills paying more than five percent today, compounding them for 15 years. But the key is, will they stay at five percent? Think about the Rule of 72. The math. Dividing 72 by a compound interest rate tells you how many years it takes to double your money. But it’s tricky. Because T-bills have a short lifespan. They provide comfort for three months at a time. It’s why investors are gobbling them up. They’re hard to pass up. But I … [Read more...]

According to new research by the Cato Institute's Center for Monetary and Financial Alternatives, the answer to the question "Can the Federal Reserve control inflation?" is no. Jai Kedia writes at Cato: Research by Cato’s Center for Monetary and Financial Alternatives (CMFA) shows that there is not much empirical support for the notion that the Fed can precisely control inflation. Earlier this year, Cato published a paper that suggested monetary policy was the least important contributor to inflation, far behind both demand and supply factors in the economy. However, that paper used … [Read more...]

You hear it all the time today. “I’m getting an incredible rate on my money,” or “I can get you this on your money.” And so on and so forth. Yes, Your Survival Guy can see it, too, especially with rates at levels we haven’t seen in around 22 years. Opportunities are everywhere for the fixed-income investor. But that doesn’t mean you dump all your existing positions. That’s throwing the baby out with the bathwater. Because when you sell an existing bond for pennies on the dollar, just to buy a higher yielding one, you’re making more interest on less dollars than what you initially started … [Read more...]

Only recently, you read about BlackRock's ironic backpedaling on ESG because of its effect on supply chains for electric vehicles. Now, some more ESG chickens are coming home to roost as ESG bankers are becoming worried that the borrowers they've been lending to aren't quite up to the ESG standards they had claimed. Now the bankers are adding clauses to loans allowing them to strip the loans of their ESG designations. Greg Ritchie and Alastair Marsh report for Bloomberg: Bankers servicing one of the world’s biggest ESG debt markets are now actively seeking legal protections to guard against … [Read more...]