The PPI estimate for China was not a fifth straight -5.9%, instead the estimate for January 2016 was -5.3%; not appreciably different but at least not blatantly sticking with a single number. China’s CPI remained below 2% at just 1.8% in January, showing that as far as calculated “inflation” none of the PBOC’s massive efforts since November last year have [...]
The orthodox intention behind NIRP is that by taxing idle “money” it will make banks put it to use. Setting aside relevant objections about what bank “reserves” actually are, negative nominal rates used in this fashion just don’t work that way. This is not an arguable point; it has been proven across 618 days or just shy of 21 months. [...]
While the eurodollar system has attained the full functions of a banking system in parallel to (and in many ways superseding) the onshore dollar version, at its core remains its primary purpose as a means to solve global payments. It is the idea of the dollar replacing gold and sterling, the reserve currency. The difference in recognizing the eurodollar as [...]
Industrial production fell 0.7% in January 2016 which was slightly better than the (revised) -1.9% estimated for December. It was, however, the third consecutive month showing a decline and, more importantly, the 6-month average turned negative for the first time in the “cycle.” Industrial production, at least as far as the Federal Reserve’s estimated series for it, is actually a [...]
December was one of the worst months on record for foreign dealing with the “dollar.” The latest TIC update further confirms why January was under such persistent and heavy liquidation pressure in almost every corner. There was a record monthly amount of “selling UST’s” in foreign channels, a dearth of private “dollar” activity and, perhaps most important of all, bank [...]
You can’t blame the PBOC for trying, as if they were even going to do it, Monday was the day. With the US closed and after the turmoil all over the “dollar” up to last Thursday, the Chinese central bank was left with practically no choice. With Hong Kong shaping up to the mess in the eurodollar, there wasn’t any [...]
As China, Japan is the definition of insanity. GDP fell 1.4% in Q4 2015, marking the fifth contraction out of the past nine quarters and yet the word “stimulus” remains attached to QQE, the Bank of Japan and Abenomics in general. At this point, how much more time and sample size is necessary before calling it a failure? In about [...]
Last month when China’s exports “only” declined by 1.7% (revised) the entire orthodox world took it as a definitive signal for the long-awaited monetary stimulus effects. Whether it was the yuan’s “devaluation” or the six rate cuts and the often double shots of reserve requirement reductions that accompanied them, December trade figures were so very encouraging. Economists, in particular, were [...]
Stocks officially entered a bear market last week, at least as measured by the MSCI World index. But then that isn’t exactly news in a lot of places on the globe with various markets around the world having eclipsed the down 20% threshold long ago. The S&P 500 is so far avoiding the ursine fate, down a mere 15% at [...]
Oil is at the lowest level relative to gold of the last 30 years, when the Fed data series begin. Deutsche Bank has calculated the series back to the Civil War. Based on their work, an ounce of gold buys you more barrels of oil than anytime since 1892. An ounce of gold currently buys you just over 42 barrels [...]
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