Silver and Gold to Benefit from SEC, BoE Political Appointments
Investors should take note of two political appointments that took place early this week—big changes, as leaders are replaced at both the U.S. Securities and Exchange Commission (S.E.C.), charged with enforcing the widely ignored rules in stock markets, and the Bank of England, charged with determining the supply of U.K. currency and price of loaning it. Both will ultimately impact Main Street. Here is how.
In a recent, widely publicized vote, the Bank of England (BoE) voted to pause bond purchases, their secondary channel of monetary expansion. This new stance is possible because the primary channel of printing, which ties new commercial bank lending to additional printing, is seen as the preferred method to get new cash into the economy, rather than back onto central bank balance sheets as excess commercial bank reserves. Secondarily, the BoE can afford to hold on outright bond purchases, as the Federal Reserve (Fed) is widely expected to “carry” the markets over the following months with its telegraphed expansion of the rate of new currency creation. Fed’s New Indicator-Based Printing Policy Removes Limits gives more detail on the Fed’s next moves. Of course, the big news is that Goldman Sachs alumni have the European Union covered, as the Bank of Canada’s Mark Carney was selected to run the Bank of England despite his statement that he “didn’t formally apply for Bank of England role.” So he, whoContinue Reading →
Queue jumping, front-running or whatever you call it is illegal already, but the S.E.C. will not enforce the law because it does not understand the problem fully, nor does it possess a method to end the abuse without destabilizing the computer algorithms that support a vast portion of the market bid.