Addogram.com have come up with a large graphic (an “addogram”) about the evolution of central banking in England and America going as far back as 1640. If you take a look at the zoomable image (click “Explore this addogram in high-resolution” once at the link above) you can see how UK & US central banks affected (and were affected by) equity, bond and gold prices since 1840. Present dynamics in central bank balance sheets and long & short-term yields looks eerily similar to 1930-1950. Interesting stuff.

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Sometimes it seems like the investment community operates on the assumption that the world started in 1929 – or at least that the financial booms, busts and speculators preceding the 1920s are irrelevant to the modern investor. We think this is misguided. Just consider that this common worldview ignores an age where speculators lived in sprawling mansions on Fifth Avenue (as opposed to apartments in the same place measuring about 1/100th the size)! We imagine that there’s a lot to learn from looking at the past 300 years as opposed to the past 80. With this in mind; here we present what we believe to be the best trades of all time:

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Several months ago we brought you a history of the Federal Reserve’s assets in charts — here we complete the story by presenting the evolution of its liabilities from 1915 to 2012.

 

As mentioned when we examined the assets side of the Fed’s balance sheet:

…the Fed has degenerated from a by and large passive institution (dealing only in high-quality self-liquidating commercial paper and gold) to an active pursuant of junk, an enabler of wars, a ‘benevolent’ combatant of the depressions of its own creation, a central planner of employment & prices and of course a forgiving friend to inconvenient market follies.

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After almost a century of the centrally planned dollar we’re delighted to present a timeline of the most amusingly disturbing speeches delivered by the Federal Reserve & Co.

 

See below for the timeline. Source: Federal Reserve Archival System for Economic Research (FRASER)

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If you ever happen to acquire an inclination for being the subject of disrepute and ridicule I highly recommend endorsing the conceit alluded to in the title. Apparently this issue is ‘so obvious’ that even gold bugs and government officials can reach common ground via the contention that I’m deluded. My folly — if you will — is to maintain that dollar debasement can be bullish for the dollar vis-à-vis other currencies at present. Since this long-standing conviction of ours is once again being corroborated by price action in the currency markets I thought I’d attempt to convince you that I’m not completely crazy. Here I outline why dollar debasement is bullish for the dollar against other fiat currencies in this environment.

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Russell Napier (renown financial historian and consultant for CLSA) has articulated some fantastic insights on the generational cycle, bear market bottoms and currencies in recent years. So for this reason we decided to compile a ‘Russell Napier’s Greatest Hits’ video for you to enjoy. See below for the video and summary.

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