The Problem with Bitcoin
The primary utility of any currency is as a unit of account. Its other roles are a store of value and medium of exchange. The unit of account is a monetary standard of measure. It is a reference upon which…
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Author Archive: Michael Kendall
Market Memo: Normalization, Tax Cuts, Geopolitical, and Gold
Despite ample evidence that we have entered a new monetary normal defined by the advent of negative interest rates and stagnated growth, few understand the implications of massive excess reserves on Fed policy. Trump’s potential tax cuts are being equated…
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China, Gold, and the Dollar
Global reserves preference in fiat U.S. dollars or gold The Nikkei Asian Review reported a global financial bombshell on September 1, 2017. “China is expected shortly to launch a crude oil futures contract priced in yuan and convertible into…
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Fed Normalization III
One way to look at central bank normalization is to envision optimum monetary and fiscal policy and work backward to what is actually possible. Optimum policy is the magic formula of stable money and low taxes. Stable money and low…
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Central Banks and Markets
The old rules for evaluating market performance no longer apply. From 1973 to 2008 one could predict market performance based on understanding the gold signal, how fiscal and geopolitical policy affected the supply and demand for base money, and how…
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Fed Normalization II
The economic term normalization has entered the financial lexicon and will soon dominate markets. As with everything the Fed has done since Nixon ended dollar stability by severing its link to gold in 1971, the advent of normalization is just…
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Fed Normalization
The Fed learned from the taper tantrum that in our hybrid central bank commanded/market economy it is best not to surprise the market. This requires notifying the market far in advance of any change in Fed policy. The Fed has…
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The Kendall Rule Explained
The Kendall Rule “As long as excess reserves persist, with IOR, in amounts necessary to facilitate Federal Reserve control of the price of interest, the trend for the minimum price of gold is determinative by its average price over the…
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How the Fed Works
The complement to understanding the dollar price of gold is understanding how the Fed works. Google “how the Fed works” and you won’t find much. Most is bland repetition from federalreserve.gov to satisfy the bureaucratic requirement of a quasi government…
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Nathan Lewis vs The Economics Profession
For the world to solve its economic problems, it needs to arrive at a consensus about what actually works in economics. More importantly, the economics profession needs to discard economic ideas that history has proven over and over do not…
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