Tag Archive: newsletter

Lesson of the S-Curve: Doing More of What’s Failed Will Fail Spectacularly

2019-05-29

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2019-05-29

S-curve of Rapid Expansion, Stagnation and Decline
I often refer to the S-Curve because Nature so often tracks this curve of ignition, rapid expansion, stagnation and decline. One lesson of the S-Curve is that the human bias to keep doing more of what worked so well in the past leads to doing more of what failed even as results turn negative.

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In Gold We Trust 2019 

2019-05-29

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2019-05-29

Eroding Trust
The New Annual Gold Report from Incrementum is Here. We are happy to report that the new In Gold We Trust Report for 2019 has been released today (the download link can be found at the end of this post). Ronnie Stoeferle and Mark Valek of Incrementum and numerous guest authors once again bring you what has become the reference work for anyone interested in the gold market.

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The Crime of ‘33, Report 27 May

2019-05-28

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2019-05-28

Gold and Silver Price
Last week, we wrote about the impossibility of China nuking the Treasury bond market. Really, this is not about China but mostly about the nature of the dollar and the structure of the monetary system. We showed that there are a whole host of problems with the idea of selling a trillion dollars of Treasurys: Yuan holders are selling yuan to buy dollars, PBOC can’t squander its dollar reserves If it doesn’t buy another currency, it merely tightens...

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FX Daily, May 28: Risk Appetites Curbed, US Leadership Awaited in FX

2019-05-28

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2019-05-28

Overview:  The euro initially reacted positively to the EU Parliament elections.  The populists did not do quite as well as many expected.  The two main groupings failed to secure a majority, but with the help of the Liberals, and possibly the Greens, that did well throughout Europe, a new European Commission will be forged.  The heads of state meet later today, but no real decisions are likely.  The horse trading will likely take most of the next...

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European elections – a more diverse but still pro-Europe parliament

2019-05-28

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2019-05-28

Evolution In EU Turnout Elections, 1979-2019
Voter turnout for European parliament elections surged across the continent, exceeding 50% for the first time in a quarter century and breaking the downward trend of the last four decades. However, differences in turnout across the EU have been substantial and a more fragmented parliament has emerged.Voter turnout was up for the first time ever and at 51%, higher than in any election since 1994. The results delivered a parliament with a...

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Chinese firms stole sensitive data from Swiss-based competitor

2019-05-28

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2019-05-28

Swiss investigators have broken up a Chinese industrial spying scheme that stole hundreds of sensitive documents from a technology company in Switzerland, reports the SonntagsZeitung newspaper. Prosecutors confirmed that a technician was fined for his part in the affair.

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Employment Barometer in the Q1 2019: Positive employment situation

2019-05-27

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2019-05-27

Switzerland Employment Level, Q1 2019
In the 1st quarter 2019, total employment (number of jobs) rose by 1.3% in comparison with the same quarter a year earlier (+0.5% with previous quarter). In full-time equivalents, employment in the same period rose by 1.5%. The Swiss economy counted 6700 more vacancies than in the corresponding quarter of the previous year (+9.4%) with the employment outlook indicator showing a downward trend (–0.1%).

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Swiss authorities intervene to halt exports of nuclear weapons material

2019-05-27

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2019-05-27

Federal authorities are stepping up efforts to prevent the sale of Swiss machinery that could be used to develop nuclear weapons. The latest interventions concern direct sales to the US and France. According to reports by the German-language newspaper NZZ am Sonntag, the federal export group halted the export of suspicious machinery to the US two times last year.

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Forget “Money”: What Will Matter Are Water, Energy, Soil and Food–and a Shared National Purpose

2019-05-27

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2019-05-27

World exports corn
If you want to identify tomorrow's superpowers, overlay maps of fresh water, energy, grain/cereal surpluses and arable land. The status quo measures wealth with "money," but "money" is not what's valuable. "Money" (in quotes because the global economy operates on intrinsically valueless fiat currencies being "money") is wealth only if it can purchase what's actually valuable.

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FX Weekly Preview: The Evolution of Three Issues are Key in the Week Ahead

2019-05-27

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2019-05-27

As May winds down, the light economic calendar will allow investors to take their cues from the evolution of three disruptive forces--trade, Brexit and the US economy. With actions against Huawei and possibly a handful of Chinese surveillance equipment producers, the US raised the stakes. The retaliatory tariffs are effective on June 1, but Beijing has not formally responded to the moves against Chinese companies.

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Swiss pay more for magazines and clothes than other countries

2019-05-26

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2019-05-26

Swiss consumers pay a “high price island” premium of up to 245% for magazines and clothing compared to prices being charged for the same goods in neighbouring countries. A consumer group study found the price differential to be higher in Italy and France than in Germany. For many people living in Switzerland the findings of the Swiss Alliance of Consumer Associations, together with watchdogs in the French and Italian-speaking regions of the...

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China’s Insurmountable Global Weakness: Its Currency

2019-05-25

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2019-05-25

US Dollar's Share of Global Payments, Loans and Reserves
If China wants superpower status, it will have to issue its currency in size and let the global FX market discover its price. Quick history quiz: in all of recorded history, how many superpowers pegged their currency to the currency of a rival superpower? Put another way: how many superpowers have made their own currency dependent on another superpower's currency?

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Image of Swiss banks improves among public

2019-05-25

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2019-05-25

The image of Swiss banks has returned for the first time to pre-financial crisis levels, according to a survey by the Swiss Bankers Association (SBA). Cybercrime remains a concern, however. “The banks’ positive image is the result of a combination of their commercial success and social responsibility, and the respondents’ positive experiences with them in everyday life,” the SBA said in a statement on Wednesday.

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Technology Is Not Just Disruptive, It’s Disastrously Deflationary

2019-05-24

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2019-05-24

Technologies by proportion of companies likely to adopt them by 2022
Deflation eats credit-dependent, mass-consumption economies alive from the inside. While AI (artificial intelligence) garners the headlines, the next wave of disruptive technologies extend far beyond AI: as the chart of technologies rapidly being adopted shows, this wave includes new materials and processes as well as the "usual suspects" of machine learning, natural language processing, data mining and so on.

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OECD lowers Swiss growth forecasts for 2019-2020 

2019-05-24

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2019-05-24

The Organisation for Economic Cooperation and Development (OECD) has revised its growth forecasts for Switzerland downwards for the next two years due to a global economic slowdown. After a strong 2018 (+2.5%), gross domestic product (GDP) growth should slow in 2019 (+1%), the OECD said on Tuesday. This compares to its earlier forecast last November of +1.6%.

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The Transitory Story, I Repeat, The Transitory Story

2019-05-24

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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....

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FX Daily, May 23: Trade, Brexit, and Disappointing Flash PMIs Weigh on Global Markets

2019-05-23

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2019-05-23

Overview:  The deterioration of the investment climate is spurring the sales of stocks and the buying of bonds. The dollar is firm.  China and the US appear to be digging as if the trade tensions will remain for some time and the breech is beginning to look too big for Trump and Xi to pull another rabbit out of the hat like they did at the end of last year when the tariff truce was struck.   The move against Huawei and possible a number of...

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Rising downside risks to euro area growth

2019-05-23

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2019-05-23

Extra Euro Area Export of Goods in Volume, 2012-2019
While our forecasts remain unchanged for now, external drags on growth prospects for the euro area look set to persist for longer than we had previously expected.A potential improvement in euro area growth in H2 2019 on the back of a revival in the global economy is in jeopardy due to the intensifying trade dispute between the US and China.

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Proposed Negative Rates Really Expose The Bond Market’s Appreciation For What Is Nothing More Than Magic Number Theory

2019-05-23

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2019-05-23

The Real GDP Problem 1988-2018
By far, the biggest problem in Economics is that it has no sense of itself. There are no self-correction mechanisms embedded within the discipline to make it disciplined. Without having any objective goals from which to measure, the goal is itself. Nobel Prize winning economist Ronald Coase talked about this deficiency in his Nobel Lecture:

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UBS to implement zero interest rate on savings accounts

2019-05-23

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2019-05-23

As of June 1, Switzerland's largest bank will stop paying interest on adult savings accounts. Funds deposited in UBS savings accounts currently earn a rate of 0.01%, just like at Credit Suisse, the other major Swiss bank. Almost all other Swiss banks pay a small interest on saving accounts with the average amounting to 0.07%.

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