Recently, the Fed decided to pause its interest rate hikes. The Fed funds rate, in this case. Better yet, the Fed decided to … lower the – from my perspective – most important policy rate! As soon as you read this article and understand why the Fed actually lowered rates, you will also understand why the Fed is losing its control over interbank interest rates.

Since quite a while ago, I have been anticipating this remarkable moment. The – for me – most important economic warning sign has turned red: the yield curve inverted and, as a consequence, short-term interest rates in the U.S. are now higher than long-term rates. All the while gold prices dropped by twenty dollars, close to a level of $1,290 per troy ounce. Motive? The dollar strengthened to €1.12 and came near a three-week high.... »

While the press euphorically announced that economic growth in the fourth quarter of last year was better than expected (because: 2.9% growth in 2018), post-crisis economic growth has been among the most disappointing in history. Now that we have an estimate for the fourth quarter, the sad but true conclusion must be that the U.S. is setting an extremely upsetting record: 13 years in a row with annual GDP growth below 3%. All this despite Trump’s election promise to grow the U.S. economy at a faster rate than 3%.