The simple fact of the matter is that gold is no longer money and hasn’t been treated that way in decades. It is a frustrating and often woeful outcome, but deference isn’t a reason to color judgement. As an investment, which is more like what gold has become, it isn’t all that straight, either. Gold behaves in many circumstances erratically; [...]
For everything that has gone wrong over the past year or so, there was and is a benign interpretation to accompany each negative factor. Oil prices were “transitory”, longer run inflation expectations didn’t matter because “professional forecasters” remained steadfastly devoted, and no matter which market has gone highly askew it’s just “normal” worry. All of these nonthreatening rationalizations trace back [...]
The Chinese central bank has managed to instill some order in both onshore and offshore RMB markets, but at what cost? The amount of intervention that was induced severely strains only the future at those maturities. Central banks are nothing if not short-termists in the purest sense, so repeating what doesn’t work never factors; all that matters is right now. [...]
Someone emailed me this article published at Yahoo!Finance that purports the Fed’s tightening is going to send stocks soaring, the DJIA mentioned specifically heading toward 25,000. The way in which this thesis was derived is the object of inquiry, starting with the belief that QE4 (QE5 by my reckoning) is forthcoming. This is not due to the Fed realizing its [...]
Economists had noticed by the mid-1970’s that what they thought were steady money relationships with the economy had broken down. This divergence was not slight; how could it be given that the era still stands today as the Great Inflation? Ostensibly, a great deal of research on the topic was devoted to monetary policy implications which is a direct assault [...]
More and more the media are finally starting to get the message about Chinese liquidity and its tendency for or against “devaluation.” For their part, the PBOC has been quite clear about its intentions all along; it was only the impenetrable fog of orthodox economics that prevented more widespread acknowledgement and understanding. There are no “reserves” at least not in [...]
If the Wall Street Journal meant to reach for reassuring comfort, they fell far short. After spending late summer last year and into the fall proclaiming that manufacturing didn’t matter (12%), the newest round of talking points are “false positives.” In other words, manufacturing and industry does matter, after all, but just “not enough” to tip into full recession. That [...]
The November update for TIC figures shows relatively few surprises given what was witnessed November into December then January. The heavy downdraft of October was somewhat reversed, and even the official sector was probably less strained (outside of China) than at any time in 2015. But these are reactive symptoms to the greater problem of “dollar” availability, so the most [...]
If markets have rebounded today after the sustained selloff on fresh “stimulus” hopes, then one would have to wonder immediately what the background fundamentals might be. Setting aside all notions of past “stimulus”, the call for more would seem to suggest, quite strongly, something far, far less than desirable. Yet, in the same breath economists and brokerage firms would have [...]
Economics in the orthodox version has it entirely backwards. If that wasn’t apparent in the last cycle, it is becoming far more so once again. This descent into math is not limited to econometrics, as it says a lot about the state of popular perception more generally. Computer models and statistics are given the moniker of “science” which is wielded [...]
Stay In Touch