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 [...]
I've been getting that question a lot these days. How high can rates go? It is asked in a way that seems to imply that the answer is obvious - not much. Why? The answer is almost always the same; the Fed can't and won't let rates go up. If they did, it would kill the economy and raise the [...]
If you had known in October all that would transpire over the next 2 ½ months, how would you have positioned your portfolio? The conventional wisdom before the election was that a Biden win would be negative for stocks because he has promised to raise taxes and specifically corporate taxes. In 2016, conventional wisdom was that a Trump victory would [...]
Gold’s not buying. Neither is the bond market. Inflation Hysteria #2 has so much less to it than #1 in 2017-18 ever did. But this one isn’t completely empty. There are some asset classes which have been absolutely on fire thus seemingly consistent with the “money printing” excesses of Fed and feds. Investors fearing for currency “debasement” and fiscal breakdown [...]
Note: There are a lot of charts in this post. That doesn't mean that we are technicians. We use charts because we are primarily interested in trends, especially long-term, big-picture trends. And charts are the easiest way to present that information. In general, you will want your tactical adjustments to respect the long-term trend. There are times when it makes [...]
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