SNB & CHF

What is the real interest rate? It is the nominal rate minus the inflation rate. I previously wrote about one problem with this notion (the nominal rate exists in the market, but the real rate is imaginary). Now let’s turn to another problem. To visualize this problem, let’s make an analogy to someone who inherits a family farm. There are two approaches to making a living from a farm. In the first—we’ll call this...

Mainstream media often speaks of the great shale gas/oil revolution and how it makes the United States more productive and a net exporter of oil. We wanted to go into more details,we compare oil production costs for U.S. shale and global oil producers. It has to be recognized that long-cycle break-Even costs of shale oil have fallen from 77$ to 62$. As reason for the currently cheap oil we see the combination of two...

Swiss Franc The upwards tendency of the euro against CHF continues.The 100 day EMA of 1.0901 has passed. Click to enlarge. FX Rates In an otherwise uneventful foreign exchange market, sterling’s slide for its fifth consecutive session is the highlight. It was pushed below $1.30 for the first time since July 12. Initial resistance for the North American session is seen near $1.3020, while the $1.2960 area...

Mark Carney, Wrecking Ball For reasons we cannot even begin to fathom, Mark Carney is considered a “superstar” among central bankers. Presumably this was one of the reasons why the British government helped him to execute a well-timed exit from the Bank of Canada by hiring him to head the Bank of England (well-timed because he disappeared from Canada with its bubble economy seemingly still intact, leaving his...

Summary: Bernanke reviews the changes in the long-term dot plots. There as been a clear trend toward lower long-term growth, unemployment and Fed funds equilibrium. The full adjustment may not be over. Former Fed Chair Bernanke keeps a blog at Brookings.   His latest post offers insight into how to think about Federal Reserve, and in particular, Fed officials’ understanding of the US economy. Bernanke’s...

See the introduction and the video for the terms gold basis, co-basis, backwardation and contango. Bubble Conditions The price of gold was down about fifteen Federal Reserve Notes this week. The price of silver was down sixty-two copper-plated zinc pennies. Is the Federal Reserve Note a suitable instrument with which to measure gold? Can one really use debased pennies – which aren’t even made of the base metal copper...

Submitted by Peter Diekmeyer via SprottMoney.com, An era of slowing growth, falling corporate profits, record debt levels, and currency debauchment has many investors buying gold as a bet against global central banks. Holding that gold outside the banking system, and for some, outside one’s own country, are increasingly popular options. Canada, Switzerland, and four other countries have particularly attractive...

Via Google Translate: Bern, 08.09.2016 – Registered unemployment in July 2016 – According to surveys conducted by the State Secretariat for Economic Affairs (SECO) were the end of July 2016 139’310 registered as unemployed at the regional employment centers (RAV), 183 more than last month. The unemployment rate remained at 3.1% in June. Compared to the previous month, unemployment increased by 5’556 persons (+ 4.2%)....

Swiss Franc Click to enlarge. FX Rates Investors favor risk assets today.  Global stocks are moving higher in the wake of the pre-weekend US rally that saw the S&P 500 close at record levels.  Bond yields are mostly firmer, again with US move in response to the robust employment report setting the tone in Asia.  European bonds participated in most of the pre-weekend move and are consolidating today with a...

Summary: Oil prices extend last week’s rally. Last week’s rally was driven by the fall of gasoline inventories. Today’s advance was helped by speculation over next month’s IEA meeting. This Great Graphic from Bloomberg shows the September light sweet crude oil futures contract since peaking in early June near $52.75.  It reached a low last week of about $39.20. The turn last week came on news that although oil...