Tag Archive: newsletter

Dollar Broadly Weaker Ahead of FOMC Decision

2020-06-11

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2020-06-11

US HY Yield, 2019-2020
The FOMC decision comes out this afternoon and we expect a dovish hold; this would of course be negative for the dollar. Ahead of the decision, May CPI will be reported; the budget statement will be of interest; Brazil reports May IPCA inflation. We are still getting mixed messages about Europe’s flagship €750 bln recovery package; French April IP fell -20.1% m/m.

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Dollar Stabilizes as the New Week Begins

2020-06-11

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2020-06-11

Coronavirus Daily Change, 2020
The dollar has stabilized a bit; Friday’s US jobs data could be a game changer. The US bond market selloff continues; for now, the weak dollar trend is hard to fight. The Brazilian government has found a way to make a bad situation worse by trying to control its Covid-19 statistics.

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Why Gold Is Safe Haven Money And Will Go Over $3,000/oz

2020-06-11

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2020-06-11

That’s a question I’m asked frequently. It’s usually followed by a comment along the lines of, “I don’t get it. It’s just a shiny rock. People dig it out of the ground and then put it back in the ground. What’s the point?”

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Technocracy vs Liberty

2020-06-11

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2020-06-11

“I prefer true but imperfect knowledge, even if it leaves much undetermined and unpredictable, to a pretense of exact knowledge that is likely to be false.” Friedrich August von Hayek

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FX Daily, June 10: Corrective Forces Still Seem in Control Ahead of the FOMC Outcome

2020-06-10

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2020-06-10

The pullback ins US shares yesterday has not derailed the global advance. Japanese and Chinese markets were mixed, the Hang Seng slipped, and Indonesia was hit with profit-taking, but the MSCI Asia Pacific Index eked out a small gain. It has fallen once past two and a half weeks. The Dow Jones Stoxx 600 opened higher but is falling for the third consecutive session.

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Swiss develop first see-through mask

2020-06-10

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2020-06-10

A fully transparent surgical mask that filters out germs but allows facial expressions to be seen has been developed by Swiss scientists. Caregivers should be able to wear them from the summer of 2021.

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Coronavirus: WHO changes advice on masks

2020-06-10

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2020-06-10

The World Health Organization (WHO) recently changed its advice on face masks. It now recommends healthy people wear them in public when social distancing is not possible, stating that they could provide a barrier for potentially infectious droplets.

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Our Latest Thoughts on the Dollar

2020-06-10

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2020-06-10

Dollar Index, 2015-2020
The dollar remains under pressure, due in large part to the Fed’s aggressive efforts to inject stimulus. We see dollar weakness persisting near-term. From a longer-term perspective, we note that the greenback remains largely rangebound and is unlikely to fall below its 2018 lows.

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A Second Against Consumer Credit And Interest ‘Stimulus’

2020-06-10

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2020-06-10

Consumer Credit, Levels SA 2006-2020
Credit card use entails a degree of risk appreciated at the most basic level. Americans had certainly become more comfortable with debt in all its forms over the many decades since the Great Depression, but the regular employment of revolving credit was perhaps the apex of this transformation. Does any commercial package on TV today not include one or more credit card offers? It certainly remains a staple of junk mail.

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Monetary Metals Provides Gold Loan to Sector Resources

2020-06-10

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2020-06-10

The loan is denominated in gold with interest and principal paid in gold. Scottsdale, Ariz., June 9, 2020—Monetary Metals® announced today that it has loaned gold to Sector Resources Canada Ltd., a British Columbia based gold mining company. The private transaction was conducted off-market, and the interest rate and terms were not disclosed.

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The Search for Yield

2020-06-10

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2020-06-10

A no-holds-barred discussion of the economy after the coronavirus shutdown and George Floyd protests. Are we facing another Great Depression? Can there be a V-shaped recovery or is this wishful thinking? What will all the new money and credit created by Congress and the Fed mean for the dollar? What kind of economic mess will Trump or Biden inherit in 2021? How far will Fed chair Powell go to keep markets propped up?

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Switzerland Unemployment in May 2020: rose to 3.4percent, seasonally adjusted rose to 3.4percent

2020-06-09

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2020-06-09

Switzerland Unemployment Rate n.s.a., May 2020
Registered unemployment in May 2020 - According to surveys by the State Secretariat for Economic Affairs (SECO), 155,998 unemployed people were registered with the regional employment centers at the end of May 2020, 2,585 more than in the previous month. The unemployment rate rose from 3.3% in April 2020 to 3.4% in the reporting month. Unemployment rose by 54,628 people (+ 53.9%) compared to the same month in the previous year.

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FX Daily, June 9: Profit-Taking Gives Turn Around Tuesday Its Name

2020-06-09

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2020-06-09

Overview: The S&P 500 turning higher on the year was the last straw before an arguably overdue bout of profit-taking kicked-in and is the dominant feature today in the capital markets.  It began slowly in the Asia Pacific region. Equities were mixed, and Australia's 2.4% rally and the 1.6% gain in Hong Kong stood out.  Europe's Dow Jones Stoxx 600 was off for a second day (~1.3%), and US stocks are trading heavily, warning that the S&P 500 may give...

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Coronavirus: Switzerland to reopen borders with EU, EFTA and UK on 15 June

2020-06-09

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2020-06-09

Switzerland recently announced that it will lift existing entry restrictions with all EU and EFTA nations and the UK on 15 June 2020. In mid-May the Swiss government announced plans to fully reopen borders with France, Germany and Austria. On 2 June 2020, it decided to hold off on a full reopening of borders with Italy despite Italy’s decision to fully reopen its borders with Switzerland on 3 June 2020.

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Global Crisis: the Convergence of Marx, Kafka, Orwell and Huxley

2020-06-09

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2020-06-09

The global crisis is not merely economic; it is the result of profound financial, sociological and political trends described by Marx, Kafka, Orwell and Huxley. The unfolding global crisis is best understood as the convergence of the dynamics described by Marx, Kafka, Orwell and Huxley. 

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Someone’s Giving Us The (Trade) Business

2020-06-09

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2020-06-09

US Trade in Goods, SA 2014-2020
The NBER has made its formal declaration. Surprising no one, as usual this group of mainstream academic Economists wishes to tell us what we already know. At least this time their determination of recession is noticeably closer to the beginning of the actual event. The Great “Recession”, you might recall, wasn’t even classified as an “official” contraction until December 2008 – a full year after the NBER figured the thing had begun.

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Central Bankers Gone Wild: It’s a New Era at the Fed

2020-06-09

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2020-06-09

Editor's Note: We keep hearing from the Fed's defenders that the current spate of new stimulus and bailouts from the central bank are really not a big deal and are all very prudent and moderate. I asked Senior Fellow Bob Murphy to provide some much needed perspective.

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The Importance of Economic Theory in Understanding Historical Data

2020-06-09

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2020-06-09

It is a common belief that sound economics must be based on facts and not on theoretical reasoning as such. Some commentators are dismissive of economic analysis that is not derived from the true data, since it is not describing the facts of reality as depicted by historical data. The use of the free market economy framework, without the central bank and government intervention and with businesses as a foundation to derive valid conclusions, is...

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Lockdown led to big jump in worker productivity

2020-06-08

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2020-06-08

Thanks to more focus and flexibility, productivity per worker increased by up to 16% during the Covid-19 lockdown in Switzerland, a study has calculated. The study by the Swiss Trade Association (SGV), reported in the NZZ am Sonntag newspaper, found that while hours worked dropped by 10% in the first quarter of 2020, GDP sank by just 2.6%.

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