Tag Archive: central-banks

The Fed Will Blink

2017-05-02

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2017-05-02

Dow Jones Industrial Average Index, Daily, Sep 2016 - May 2017
GUALFIN, ARGENTINA – The Dow rose 174 points on Thursday. And Treasury Secretary Steve Mnuchin said we’d have a new tax system by the end of the year. Animal spirits were restless. But which animals? Dumb oxes? Or wily foxes? Probably both.

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Sweden’s Gold Reserves: 10,000 gold bars (pet rocks) shrouded in Official Secrecy

2017-04-28

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2017-04-28

In February 2017 while preparing for a presentation in Gothenburg about central bank gold, I emailed Sweden’s central bank, the Riksbank, enquiring whether the Riksbank physically audits Sweden’s gold and whether it would provide me with a gold bar weight list of Sweden’s gold reserves (gold bar holdings). The Swedish official gold reserves are significant and amount to 125.7 tonnes, making the Swedish nation the world’s 28th largest official gold...

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Cracks in Ponzi-Finance Land

2017-04-27

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2017-04-27

Retail Junk Debt, April 2017
Retail Debt Debacles The retail sector has replaced the oil sector in a sense, and not in a good way. It is the sector that is most likely to see a large surge in bankruptcies this year. Junk bonds issued by retailers are performing dismally, and within the group the bonds of companies that were subject to leveraged buyouts by private equity firms seem to be doing the worst (a function of their outsized debt loads).

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Simple Math of Bank Horse-Puckey

2017-04-23

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2017-04-23

Sky from Mt. Wilson
We stepped out on our front stoop Wednesday morning and paused to take it all in. The sky was at its darkest hour just before dawn. The air was crisp. There was a soft coastal fog. The faint light of several stars that likely burned out millennia ago danced just above the glow of the street lights.

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Hell To Pay

2017-04-18

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2017-04-18

Yellen Cartoon
Economic nonsense comes a dime a dozen. For example, Federal Reserve Chair Janet Yellen “think(s) we have a healthy economy now.” She even told the University of Michigan’s Ford School of Public Policy so earlier this week. Does she know what she’s talking about?

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LIBOR Pains

2017-04-01

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2017-04-01

If one searches for news on LIBOR (=London Interbank Offered Rate, i.e., the rate at which banks lend dollars to each other in the euro-dollar market), they are currently dominated by Deutsche Bank getting slapped with a total fine of $775 million for the part it played in manipulating the benchmark rate in collusion with other banks (fine for one count of wire fraud: US$150 m.; additional shakedown by US Justice Department: US$625 m., the price...

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TIC Analysis of Selling

2017-03-25

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2017-03-25

When the Treasury Department released its Treasury International Capital (TIC) data for December, what was a somewhat obscure report suddenly found mainstream attention. Private foreign investors had sold tens of billions in US securities primarily US Treasury bonds and notes which the media then made into some kind of warning to then-incoming President Trump. It was supposed to be a big deal, the kind of rebuke reserved for disreputable leaders of...

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Their Gap Is Closed, Ours Still Needs To Be

2017-02-19

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2017-02-19

Potential Real GDP, 1999Q1 - 2009Q1
There are actually two parts to examining the orthodox treatment of the output gap. The first is the review, looking backward to trace how we got to this state. The second is looking forward trying to figure what it means to be here. One final rearward assessment is required so as to frame how we view what comes next. As I suggested earlier this week, the so-called output gap started at the trough of the Great “Recession” at around 10% of the CBO’s...

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Incrementum Advisory Board Meeting, Q1 2017 and Some Additional Reflections

2017-02-09

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2017-02-09

Yuan Onshore Weekly
The quarterly meeting of the Incrementum Advisory Board was held on January 11, approximately one month ago. A download link to a PDF document containing the full transcript including charts an be found at the end of this post. As always, a broad range of topics was discussed; although some time has passed since the meeting, all these issues remain relevant.

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The Central Banks Pull Back: Now It’s Up to Fiscal Policy to “Save the World”

2017-02-08

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2017-02-08

Top Spending from 1990 to 2012
Another problem is the rise of social discord, for reasons that extend beyond the reach of tax reductions and increased infrastructure spending. Have you noticed that the breathless anticipation of the next central bank "save" has diminished? Remember when the financial media was in a tizzy of excitement, speculating on what new central bank expansion would send the global markets higher in paroxysms of risk-on joy?

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A Biased 2017 Forecast, Part 1

2017-01-05

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2017-01-05

hind-sight
A couple weeks ago I was lucky enough to see a live one hour interview with Michael Lewis at the Annenberg Center about his new book The Undoing Project. Everyone attending the lecture received a complimentary copy of the book. Being a huge fan of Lewis after reading Liar’s Poker, Boomerang, The Big Short, Flash Boys, and Moneyball, I was interested to hear about his new project.

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Chinese Philosopher Kings, Losing their Yuan FX Religion?

2017-01-04

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2017-01-04

Two Stages of Chinese Monetary Policy - Inflationary Deflationary
It took a while, but the world are slowly coming to grips with the simple fact that the red-suzerains in Beijing are not the infallible leaders en route to a new superior economic model as they thought they were. All the craze that emanated from the spurious work of Joshua Cooper Ramo, which eventually led to works like “How China’s Authoritarian Model Will Dominate the Twenty-First Century,” are slowly catching up to reality.

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Why the Fed Destroyed the Market Economy

2017-01-01

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2017-01-01

Swing voters are a fickle bunch. One election they vote Democrat. The next they vote Republican. For they have no particular ideology or political philosophy to base their judgment upon.

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How to Invest in the New World Order

2016-12-26

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2016-12-26

In our latest Toward a New World Order, Part III we ended by promising to look closer at investment implications from the political and economic shift we currently find ourselves in; and that story must begin with the dollar.

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We Know How This Ends – Part 2

2016-12-23

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2016-12-23

History Most Definitely Rhymes
In March 1969, while Buba was busy in the quicksand of its swaps and forward dollar interventions, Netherlands Bank (the Dutch central bank) had instructed commercial banks in Holland to pull back funds from the eurodollar market in order to bring up their liquidity positions which had dwindled dangerously during this increasing currency chaos.

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Toward A New World Order, part III

2016-12-19

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2016-12-19

A new world order is coming of age and the transition is painful to accept for a Western middle class with a deep-seated sense of entitlement. We showed how the West feels threatened globally in Toward a New World Order and followed up explaining how this translate into domestic politics in Toward a New World Order Part II. We will now continue this series by showing how gross economic mismanagement have created the new political class that we...

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Has the Fed Turned “Hawkish?”

2016-12-18

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2016-12-18

Fed birdhouse
Juiced, Stimulus, in a general sense, is something that causes an action or response. A ringing alarm clock may prompt someone to exit their slumber. Or a fist to the gut may force someone to gasp for breath.

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Gold Bull Market Remains Intact – Long Term Fundamentals Outweigh Short Term Market Gyrations

2016-11-22

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2016-11-22

Kool-AID
In early 2016 gold had a big bull run. The precious metal rose close to 25% this year, pushed higher in a summer rally that peaked on July 10th. Gold experienced a bumpy ride over the remainder of the summer though, as investors became increasingly concerned about a potential rate hike by the Federal Reserve. Uncertainty returned to gold market and has intensified further since then.

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European Central Bank gold reserves held across 5 locations. ECB will not disclose Gold Bar List.

2016-11-17

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2016-11-17

Eurozone
The European Central Bank (ECB), creator of the Euro, currently claims to hold 504.8 tonnes of gold reserves. These gold holdings are reflected on the ECB balance sheet and arose from transfers made to the ECB by Euro member national central banks, mainly in January 1999 at the birth of the Euro. As of the end of December 2015, these ECB gold reserves were valued on the ECB balance sheet at market prices and amounted to €15.79 billion.

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The Fed’s “Hothouse” Is in Danger

2016-11-14

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2016-11-14

Federal Funds Rate
RHINEBECK, New York – It is a beautiful autumnal day here in upstate New York. The trees are red, brown, and yellow. Squirrels hop across the lawn, collecting their nuts. Unseasonably warm the last few days, rain showers are moving in from across the Hudson, driven by a chilly wind.

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