Slimane Himora https://goldbroker.com/author/slimane-himora Monetary printing has been part of the financial landscape for several decades now. Quantitative easing (QE), commonly known as the "printing press", has been an essential tool for central banks to stabilize the economy in times of crisis. However, its impact on economic inequality is increasingly being debated. We will analyze how money printing can exacerbate wealth and income inequalities, and how to get back in the game legitimately. How does quantitative easing work? Quantitative easing involves a central bank buying financial assets, mainly government bonds and asset-backed securities, to inject money directly into the economy. This policy aims to lower long-term interest rates, stimulate investment and consumption, and thus support economic growth. One of the most recent examples was the Covid crisis in 2020, which paralyzed the global economy for several months. To kick-start economic activity, the world's leading central banks injected money.... Tue, 27 Aug 2024 05:45:08 +0000 https://goldbroker.com/news/money-printing-qe-contributes-growing-inequalities-3397 Since 2022, many analysts have been forecasting a recession in the United States. However, once again this year, the world's leading economy has escaped the recessionary scenario anticipated by players in the US financial sector. In this article, we'll try to understand how a recession manifests itself and how long it takes to materialize. As a reminder, recessions are often beneficial for gold price growth. What is a recession (definition)? A recession is a temporary period of economic decline during which a country's economic activity slows significantly. It is generally characterized by several factors: Decline in GDP: The country's gross domestic product (GDP) is declining for at least two consecutive quarters. Rising unemployment: The unemployment is increasing as companies cut back on production and therefore on workforce. Reduced consumer spending: Consumers are spending less on goods and services, which has a negative impact on busine... Tue, 09 Jul 2024 05:46:53 +0000 https://goldbroker.com/news/how-does-recession-materialize-3375 In 2024, the US Federal Reserve is operating in a complex economic landscape, marked by persistent inflation, stagnant economic growth and several geopolitical conflicts that are reigniting international tensions. For the time being, the Fed is maintaining a firm stance on interest rates, but remains attentive to developments in the job market. We saw this with the release of NFP (Non Farm Payrolls). In April, the US economy created just 175,000 jobs, the lowest figure since the 2020 recession. In addition, the unemployment rate has risen by +0.4% since April 2023, highlighting a slight deterioration in the job sector. Why is a rate cut unlikely for the time being? As we saw in a previous article, financial conditions continue to ease, fuelling the rally in risk assets. As evidence of this, technology stocks recorded their biggest rise since 2021. Financial conditions continue to ease, despite the Fed's declarations concerning its fight against inflation:... Wed, 15 May 2024 05:40:49 +0000 https://goldbroker.com/news/stagflation-money-printing-explosive-cocktail-golds-favor-3345 Since the start of the year, we've seen a sharp rise in so-called "risk assets" such as tech stocks and cryptocurrencies. In this article, I'll explain the background to this meteoric rise. On the other hand, Bitcoin's spectacular performance raises questions and fuels a current debate: Can Bitcoin replace gold as a store of value? The origins of this year's rise in risk assets First, we need to understand the reason for Bitcoin's recent rise before we can answer this question in any depth. The current rally in the equity and crypto-asset markets dates back to October/November 2023. At that time, we were already seeing an easing of financial conditions. It's crucial to understand here that the Federal Reserve (Fed) is carrying out a de facto new quantitative easing (QE) program by reusing the excess liquidity created in 2020-2021 to purchase new bonds. This type of open market operation is part of the Fed's toolbox for i... Wed, 06 Mar 2024 12:12:06 +0000 https://goldbroker.com/news/is-bitcoin-really-golds-replacement-3298 Gold is poised to reach record levels, ending a period of price lateralization that has lasted more than five years. This comes against a backdrop in which interest rate hikes by the US Federal Reserve appear to have peaked. At a time when bonds are at their most volatile, what asset can provide healthy diversification in a global portfolio? In this article, we'll clarify the current situation. Is the policy of raising interest rates a closed chapter? Following the year 2020, marked by a very accommodating monetary policy to stimulate the post-COVID economy (objective achieved), but faced with inflation problems stemming from the drastic increase in the money supply, the Fed implemented a restrictive monetary policy. This policy aimed to raise interest rates and reduce the Fed's balance sheet by not renewing maturing bonds. Since 2022, a completely different tune has been playing, as we have just witnessed one of the most rapid monetary tightenings in hist... Tue, 19 Dec 2023 06:46:13 +0000 https://goldbroker.com/news/gold-asset-choice-recessionary-times-3249 The global economy is currently going through a long period of transition. After a recession observed during the Covid pandemic just three years ago, some leading economic indicators are starting to turn red again. After a long period of stabilization, we are also witnessing a historic inversion of the yield curve and an upturn in commodity prices, which could trigger a new wave of inflation at a time when producer prices are back to their lows. This situation could prove favourable for gold, but unfavourable for equities, which are also suffering from high valuations and have never been so unattractive compared to US government bonds, or even the yellow metal. Stocks at unattractive levels! The rally that has been underway for almost fourteen years now (+585% for the S&P500 and +400% for the CAC40, dividends reinvested) may soon come to a halt. Since the financial crisis of 2008, stock markets have enjoyed almost uninterrupted growth, fuelled by historical... Mon, 07 Aug 2023 06:01:41 +0000 https://goldbroker.com/news/us-credit-rating-downgrade-jeopardizes-bond-arbitrage-3166 Since the resolution of the recent debt ceiling "crisis", the US national debt has soared by over $1.8 trillion. A situation that raises concerns about its long-term sustainability. To understand the scale of the increase in U.S. debt, it's useful to compare it with U.S. financial history. It took the U.S. 209 years to accumulate its first $1.8 trillion in debt. This period covers many major historical events, including several wars, the Great Depression and numerous other economic crises. However, after an agreement described as "historic" on the debt ceiling, we saw this colossal sum added to the national debt in a record time of 8 weeks. This acceleration of debt is alarming. Not only does it underscore how quickly debt can accumulate, but it also highlights the challenges the U.S. will face in managing this debt in the future. If this trend continues, the debt burden could become unsustainable, with potentially serious consequences f... Wed, 02 Aug 2023 07:47:05 +0000 https://goldbroker.com/news/us-debt-exploding-3165 For the past 3 years, we have been faced with the largest monetary injections in history. These liquidity injections are not without consequences for your long-term purchasing power. In this article, we'll look at the reasons for long-term currency devaluation, and at ways of protecting yourself against it in the long term. Why do we need these monetary injections and what are the long-term consequences? Political and central bank leaders point to the positive short-term effects of monetary injections on the economy. However, the long-term effects are rarely mentioned. When an economic crisis occurs, central banks may have to support the economy with injections of liquidity, as was the case in recent years during the subprime and Covid crises: during these two crises, central bank balance sheets more than doubled. We can distinguish between two types of monetary policy: Dovish monetary policy: Its aim is to promote economic growth by easing financial conditi... Tue, 13 Jun 2023 05:43:05 +0000 https://goldbroker.com/news/currency-devaluation-how-to-protect-your-wealth-long-term-3107