Gold at $1800 an ounce has a lot of people you wouldn’t expect lining up in Jay Powell’s camp. What else could it be, right? Bullion is an inflation hedge, that’s what everyone says. Therefore, quite obviously, skyrocketing gold must indicate the dollar destruction gold aficionados are always predicting. Unbeknownst to them, and likely to agitate the hell out of [...]
It was an absolutely mad scramble. Banking difficulties in the Fed’s sixth district, the Atlanta branch, had sparked an irresistible wave of panic which spread throughout the Eastern seaboard. By December 1930, it had reached the streets of New York City – the world’s monetary capital. On December 11, customer withdrawals had left the Bank of the United States with [...]
Saudi Arabia once burned through the bond market on par with demand for Argentina’s paper. During the 2016-17 globally synchronized growth-inspire Eurobond binge, the country made up for its lost oil revenues (oil crash and all) with dollar-denominated, offshore debt flotations. These merely stabilized the country’s forex reserves after they had collapsed (by a third) alongside benchmark Brent crude prices [...]
The Fed unveiled what was supposed to be shock and awe. Instead, it was the predictable series of upsizing the bazookas, monetary armaments in name only. I’ll write it again: there is no money in monetary policy. Central banks are not central. That was the primary lesson of September’s repo rumble, and not for the first time since August 9, [...]
Another day, another big risk-off move. And yet, the world's great end-of-world hedge, gold, is getting pummeled even as it seems the world is edging closer to its end. Yes, another day another clear demonstration of collateral scarcity - as opposed to bank reserve scarcity which isn't a thing (sorry, Jay). If you have a moment, check out the intraday [...]
With interest rates tumbling all over the world, gold should be killing it. Instead, gold is getting killed. The major correlation for this precious metal has been the bond market, falling yields. And that makes intuitive sense; gold as a hedge pays no interest, but if competing safety instruments like UST’s end up paying up a lot less then gold [...]
It’s another example of the difficulties in trying to evaluate and analyze non-economic factors. China’s virus outbreak is a nightmare for those unfortunately living through it, and Chinese officials aren’t doing themselves any favors. Trust is a sketchy enough concept. The WHO today says there is no pandemic, which, as Erik Townsend of MacroVoices points out, immediately puts this announcement [...]
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