Sticking with the history of the “dollar” of these past two years, economists and gold de-buggers had to have been at least initially encouraged by what they saw outwardly of interest rates and related financial factors in 2013. Almost as soon as “taper” became a mainstream concept, right at the start of that May, the treasury curve steepened and nominal [...]
With all the problems right now beyond Greece and China, from Canada’s “puzzling” recession to Brazil’s unfolding disaster, and even the still-“shocking” US economic slump, it is interesting that gold garnered the most attention in early Monday trading. The fact that gold prices were slammed in Asian trading was certainly significant, but that really isn’t why gold is being highlighted [...]
When US retail sales jumped in May on seasonal adjustments alone, economists and mainstream commentary lost all composure as they were certain that meant the “slump” was over and the dominant narrative would continue. The same occurred in Europe over a slight pickup in overall lending, not even in the household or business sectors, which was proclaimed as nothing but [...]
With Greece settled and China moving away, for now at least, from the edge, it appears as if the “dollar” has settled back from the collateral calls of last week. That would make July 15 as seemingly as much of a dud as April 15 was, both in sharp contrast to October 15 and then January 15. That does not [...]
When the IMF released its semi-annual World Economic Outlook in April, it was still caught up in the GDP/Establishment Survey frenzy of late 2014. Despite the fact that Q1 GDP was certain to be negative by the time of publication, the IMF was wholly undeterred preferring instead to view the US as still the global engine and hope. They even [...]
For the most part, the concept of leverage is straightforward and intuitive. In physics, a lever is something that multiplies force to gain mechanical advantage. That is why the word was transported to finance as it means to multiply the effort of a small capital base. The “mechanical” force applied in the form of financial leverage used to be borrowed [...]
There is little doubt now that the “dollar” is wreaking havoc upon the global financial complex. Commodities are being battered almost everywhere, and in a manner not seen since the last version of “dollar” trouble prior to the March 18 FOMC “dovishness.” This time, however, there is almost nothing of monetary policy in the moves, just plain and pure uncertainty [...]
The Federal Reserve under Alan Greenspan and then Ben Bernanke has escaped, largely, responsibility for the panic in 2008 mostly because there is no direct link between monetary policy and the housing bubble. The most stinging criticism that comes out of the era is Greenspan’s “ultra-low” interest rate setting for federal funds, but there is no smoking gun in the [...]
While the outward-facing pieces of the eurodollar puzzle show a little bit of Greek reference, the inward parts seem much more defined by the systemic erosion in liquidity and capacity quite apart from all that. LIBOR and other money rates continue to rise, as do risk spreads. Since the QE system was laid out roughly on liquidity as function, the [...]
With Greece eliciting full uncertainty across the global financial complex, it isn’t unsurprising to see “dollar” proxies indicating tightness in almost uniform fashion. There isn’t as much a cascade, yet, as there had been in early October and early December last year, but the movement has finally coalesced. The “dollar” world had begun what looks in hindsight a slow turn [...]
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