Tag Archive: inflation

CPI Changes On Energy: The Inflation Check

2019-10-13

by

2019-10-13

CPI Changes on Energy, 1995-2019
After constantly running through what the FOMC gets (very) wrong, let’s give them some credit for what they got right. Though this will end up as a backhanded compliment, still. After having spent all of 2018 forecasting accelerating inflation indices, from around New Year’s Day forward policymakers notably changed their tune.

Read More »

Monthly Macro Monitor: Doom & Gloom, Good Grief

2019-10-12

by

2019-10-12

Economic Growth & Investment, October 2019
When I first got in this business oh so many years ago, my mentor told me that I shouldn’t waste my time worrying about the things everyone else was worrying about. As I’ve related in these missives before, he called those things “well worried”. His point was that once everyone was aware of something it was priced into the market and not worth your time.

Read More »

Big Trouble In QE Paradise

2019-10-07

by

2019-10-07

Germany 10-year Bund Yield, 2014-2016
Maybe it was a sign of things to come, a warning how it wasn’t going to go as planned. Then again, when it comes to something like quantitative easing there really is no plan. Other than to make it sound like there is one, that’s really the whole idea. Not what it really is and what it actually does, to make it appear like there’s substance to it.

Read More »

Why The Japanese Are Suddenly Messing With YCC

2019-10-06

by

2019-10-06

Japan JGB Curve Spreads, 1985-2019
While the world’s attention was fixated on US$ repo for once, the Bank of Japan held a policy meeting and turned in an even more “dovish” performance. Likely the global central bank plan had been to combine the Fed’s second rate cut with what amounted to a simultaneous Japanese pledge for more “stimulus” in October. Both of those followed closely an ECB which got itself back in the QE business once more.

Read More »

Big Difference Which Kind of Hedge It Truly Is

2019-09-03

by

2019-09-03

PCE Deflator, January 20 15 - July 2019
It isn’t inflation which is driving gold higher, at least not the current levels of inflation. According to the latest update from the Bureau of Economic Analysis, the Federal Reserve’s preferred inflation calculation, the PCE Deflator, continues to significantly undershoot. Monetary policy explicitly calls for that rate to be consistent around 2%, an outcome policymakers keep saying they expect but one that never happens.

Read More »

THE FED’S CAPITULATION: WHAT IT MEANS FOR GOLD INVESTORS

2019-08-27

by

2019-08-27

Fed's Capitulation - Claudio Grass
After the Federal Reserve’s monetary policy U-turn earlier this year and the central bank’s decision to cut interest rates for the first time in a decade, mainstream investors and analysts believe that holding rates lower and for longer will help keep stock markets afloat and the economic expansion alive.

Read More »

“More of the same” at the ECB increases gold’s appeal

2019-08-22

by

2019-08-22

“The intellectual leaders of the peoples have produced and propagated the fallacies which are on the point of destroying liberty and Western civilization.” Ludwig von Mises, Planned Chaos. It took multiple meetings and over 50 hours of official negotiations for EU leaders to reach an agreement on the appointments for the top jobs of the EU and the ECB, but in mid-July the results finally came in.

Read More »

The Path Clear For More Rate Cuts, If You Like That Sort of Thing

2019-08-15

by

2019-08-15

U.S. Gasoline Stocks, 2012-2019
If you like rate cuts and think they are powerful tools to help manage a soft patch, then there was good news in two international oil reports over the last week. The US Energy Information Administration (EIA) cut its forecast for global demand growth for the seventh straight month. On Friday, the International Energy Agency (IEA) downgraded its estimates for the third time in four months.

Read More »

I Know Usury When I See It, Report 4 Aug

2019-08-05

by

2019-08-05

Gold and Silver Price
“I know it, when I see it.” This phrase was first used by U.S. Supreme Court Justice Potter Stewart, in a case of obscenity. Instead of defining it—we would think that this would be a requirement for a law, which is of course backed by threat of imprisonment—he resorted to what might be called Begging Common Sense. It’s just common sense, it’s easy-peasy, there’s no need to define the term…

Read More »

When Verizons Multiply, Macro In Inflation

2019-06-16

by

2019-06-16

CPI Changes On Energy, 1995-2019
Inflation always brings out an emotional response. Far be it for me to defend Economists, but their concept is at least valid – if not always executed convincingly insofar as being measurable. An inflation index can be as meaningful as averaging the telephone numbers in a phone book (for anyone who remembers what those things were).

Read More »

Janus Powell

2019-06-09

by

2019-06-09

US Treasury Real Yields, 2007-2019
Again, who’s following who? As US Treasury yields drop and eurodollar futures prices rise, signaling expectations for lower money rates in the near future, Federal Reserve officials are catching up to them. It was these markets which first took further rate hikes off the table before there ever was a Fed “pause.”

Read More »

Monthly Macro Monitor: Economic Reports

2019-06-04

by

2019-06-04

Is recession coming? Well, yeah, of course, it is but whether it is now, six months from now or 2 years from now or even longer is impossible to say right now. Our Jeff Snider has been dutifully documenting all the negativity reflected in the bond and money markets and he is certainly right that things are not moving in the right direction.

Read More »

THE PENALTY FOR SAVING

2019-05-30

by

2019-05-30

In previous articles, we have outlined in great detail the many faults of the current monetary policy direction of major central banks and the large-scale economic impact of keeping interest rates artificially low. Among the worst offenders is the ECB, that is unapologetically persistent on continuing this exercise in absurdity that are negative interest rates.

Read More »

The Transitory Story, I Repeat, The Transitory Story

2019-05-24

by

2019-05-24

Money Markets Equivalents, 2017-2019
Understand what the word “transitory” truly means in this context. It is no different than Ben Bernanke saying, essentially, subprime is contained. To the Fed Chairman in early 2007, this one little corner of the mortgage market in an otherwise booming economy was a transitory blip that booming economy would easily withstand. Just eight days before Bernanke would testify confidently before Congress, the FOMC had met to discuss their lying eyes....

Read More »

Nonmonetary Cause of Lower Prices, Report 5 May

2019-05-07

by

2019-05-07

Gold and Silver Price
Over the past several weeks, we have debunked the idea that purchasing power—i.e. what a dollar can buy—is intrinsic to the currency itself. We have discussed a large non-monetary force that drives up prices. Governments at every level force producers to add useless ingredients, via regulation, taxation, labor law, environmentalism, etc.

Read More »

The Two Faces of Inflation, Report 22 Apr

2019-04-23

by

2019-04-23

Gold and Silver Price
We have a postscript to last week’s article. We said that rising prices today are not due to the dollar going down. It’s not that the dollar buys less. It’s that producers are forced to include more and more ingredients, which are not only useless to the consumer. But even invisible to the consumer. For example, dairy producers must provide ADA-compliant bathrooms to their employees.

Read More »

New Inflation Indicator, Report 14 Apr

2019-04-16

by

2019-04-16

Gold and Silver Price
Last week, we wrote that regulations, taxes, environmental compliance, and fear of lawsuits forces companies to put useless ingredients into their products. We said: “For example, milk comes from the ingredients of: land, cows, ranch labor, dairy labor, dairy capital equipment, distribution labor, distribution capital, and consumable containers.”

Read More »

What Causes Loss of Purchasing Power, Report 7 Apr

2019-04-09

by

2019-04-09

U.S. small-cap debt builds up, 2002-2019
We have written much about the notion of inflation. We don’t want to rehash our many previous points, but to look at the idea of purchasing power from a new angle. Purchasing power is assumed to be intrinsic to the currency. We have said that the problem with the word inflation is that it treats two different phenomena as if they are the same.

Read More »

Monthly Macro Chart Review: April 2019

2019-04-09

by

2019-04-09

Economic Growth & Investment
The economic data reported over the last month managed to confirm both that the economy is slowing and that there seems little reason to fear recession at this point. The slowdown is mostly a manufacturing affair – and some of that is actually a fracking slowdown – but consumption has also slowed.

Read More »

Monthly Macro Monitor: Well Worried

2019-03-28

by

2019-03-28

Yield Curve and Lending Standards 1990-2018
Don’t waste your time worrying about things that are well worried. Well worried. One of the best turns of phrase I’ve ever heard in this business that has more than its fair share of adages and idioms. It is also one of the first – and best – lessons I learned from my original mentor in this business. The things you see in the headlines, the things everyone is already worried about, aren’t usually worth fretting over.

Read More »
Page 112345...10...Last »