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METALS & MARKET UPDATE FEB 6th: Highly-Leveraged Market Direction Based On Coming CPI DataFebruary 6, 2022
The highly-leveraged markets could experience either a significant "Melt-up" or "Breakdown" depending on the CPI figure released this week. This would also be true for the precious metals price action. Thus, the markets will likely be choppy until...
The Treasury added almost $400B of debt in January, the third most since July 2020. The other two larger amounts were both right after the debt ceiling was raised. Perhaps most important is the fact that almost $200B of the newly added debt was in short-term Bills (turquoise below).
As reported last week, multiple data points are starting to flash yellow in the gold market. Cash settlements are at a recent high, open interest has spiked in March way above normal, and roll costs are creeping up.
"I have to invest into something that is going to keep up with or exceed the cost of capital. Now how are you going to make money, if you pretty much give up all your capital and you start creating a new product to compete against Microsoft, Facebook, Amazon, Apple, or Google? If you want to preserve shareholder value, you have to buy bitcoin." said Michael Saylor, CEO of MicroStrategy, on June 8, 2021. Let's take a look at his ideas a little bit closer.
It was minted at the Tower of London in January 1344, but was only in circulation for seven months before it was withdrawn. There are few survivors.
2021 was a great year for risk assets with equities and crypto markets touching all-time highs. The outlook for 2022 is more uncertain as central banks turn hawkish to fight inflation pressures. In this environment, gold is showing relative strength early in the new trading year.
Billionaire Investor Ray Dalio Says the US Appears To Be on the Path to 'Some Form of Civil War'Feb 4, 2022 - 12:41:59 PST
Dalio wrote in a LinkedIn post that the country is witnessing greater amounts of populism and extremism, and outlined why he thinks the country is on a potential path to civil war.
No matter how much the American economy grows during the next decade, the government will have serious trouble... Something has to give. No matter how one crunches the numbers, a crisis is looming, and Americans are bound to see their standard of living fall and their global empire collapse. It Has Happened Before!
‘Trouble In The Bond Market’ Will Render The Fed Powerless And The Assets To Own Now | FleckensteinFeb 4, 2022 - 12:15:39 PST
A lot of people regard the Federal Reserve as omnipotent. But it’s not. The bond market is more powerful. And its days of deferring to the Fed’s wishes may soon be over. Should that happen, all heck will break loose in the markets.
Brazil and Russia caught up via shock-and-awe rate hikes. But most central banks fell further behind. Then there are the reckless laggards.
The Biden tweet states that “[t]his didn't happen by accident.” He is right. It is more like a Keynesian trainwreck.
The Fed isn’t even a central bank; though it does buy a lot of bonds from time to time. This sounds terrifying and conclusive. But how it sounds is really the whole thing and always has been.
While the Fed, and all of its cheerleaders engender false confidence from the public, they also have false confidence in themselves. That which they believe they can control, they ultimately cannot. Manipulating interest rates and counterfeiting dollars may seem to create short-term benefits...
January showed very strong growth with 467k jobs being reported by the BLS. This crushed expectations of 150k. Some analysts even expected a contraction given the reported loss by ADP on Wednesday.However, the bigger story is the revisions of prior months. October to December saw upward revisions of nearly 900k jobs! The story is more complex though. The BLS has updated their models to “smooth” out the job numbers for seasonality. Much of the gains were pulled from job reports last summer (more on this below).
In a speech last month to Goethe University's Institute for Law and Finance in Frankfurt, Germany, the general manager of the Bank for International Settlements, Agustin Carstens, declared that the "soul" of money is trust in central banks:
Silver in particular is historically cheap compared to just about any other commodity on the planet. The upshot is that when silver is ready to move, it can take off like a rocket.
"On February 1st 2022 the US national debt surpassed $30 Trillion for the first time - just as the Fed is preparing a hiking campaign. Political decisions to trade the future for the present tempt further assaults upon the ever-declining soundness of the US dollar." ~ Peter C. Earle
Feb 4, 2022 - 07:49:41 PST
The idea would benefit central planners and grow the ranks of bureaucrats while making the poor even poorer.
The hyperinflation of the continental dollars that Congress printed between 1775 and 1780 was not the first paper money episode in North America.
A Potemkin economy has lured the Fed, economists, and Wall Street analysts into a potentially dangerous assumption of economic normalcy. However, with a review of how we got here, we can better understand the costs and consequences of monetary interventions.