Consumer sentiment hit a decade low last month, falling 6 points from an already low level. The culprit? Inflation, which we learned last week hit a 3 decade high in October. And if the founder of the University of Michigan consumer sentiment survey is right, the next thing we'll see is an economic slowdown. George Katona was a psychologist who [...]
What an intriguingly odd month September 2017 turned out to be. To start with, Reflation #3 only seemed to be gaining strength. The full throat behind Inflation Hysteria #1 was still ahead, as was its related personage the BOND ROUT!!!! And yet, early in that late summer month a sudden eruption; actually several. On September 5, T-bills. A day later [...]
Today is the 50th anniversary of the "Nixon shock", the day President Richard Nixon closed the gold window and ended the post-WWII Bretton Woods currency agreement. That agreement, largely a product of John Maynard Keynes, pegged the dollar to gold and most other currencies to the dollar. It wasn't a true gold standard as only other countries that were party [...]
This one wasn’t nearly so perfect as the scramble for collateral had been a few Tuesdays ago. Last night’s, however, did have a sizable, visible contribution from the gold marketplace. That’s a significant tell even if it didn’t necessarily correlate by the minute with T-bills and other collateral numbers.In this instance if only because the gold “slam”, which was enormous, [...]
Searching for clues or even small collateral indications, you can’t leave out the gold market. We’ve been on the lookout for scarcity primarily via the T-bill market, and that’s a good place to start, yet looking back to last March the relationship between bills and bullion was uniquely strong. It’s therefore a persuasive pattern if or when it turns up [...]
I told you last week that there were strange things going on in the labor market but I had no idea how much of an understatement that really was. Much of last week's economic focus was on the inflation report but I think the JOLTS report may turn out to be more significant. Inflation was indeed pretty hot year over [...]
The US economy is still stuck in the stall it's been in since early spring. Sometime in mid-March everything just seems to have gone into suspended animation. Interest rates and the copper/gold ratio stopped rising. Real interest rates (TIPS) stopped rising. The US dollar started falling. But nothing has fallen so far as to warrant concern about a double-dip recession. [...]
Maybe it’s just me, but if you’re going to scream about everyone screaming about inflation it’s probably not a good idea to use Janet Yellen’s face as this idea’s avatar. Even if most in the public likely don’t know why, this can’t help your credibility with the rest who absolutely do. And by “the rest”, who do I mean? A [...]
The “too many” Treasury argument which ignited early in 2018 never made a whole lot of sense. It first showed up, believe it or not, in 2016. The idea in both cases was fiscal debt; Uncle Sam’s deficit monster displayed a voracious appetite never in danger of slowing down even though – Economists and central bankers claimed – it would’ve [...]
Putting some charts and data behind Friday’s extensive essay about bank reserves and inflation intended to further highlight some key parallels…The precursor event to yield caps being imposed in the United States actually took place during the Great Depression. Then – as now – officials at the central bank expected their “money printing” efforts to pay off in the reverse [...]
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