SNB & CHF

The prices of the metals rose a bit this quiet, holiday week. Merry Christmas! Speaking of Christmas, Keith’s brother who is an amateur woodworker of growing skill, gave him this present on Friday. Regular readers may recognize the design as our logo. Each “M” is made of a single piece of wood. They are stained or painted in the correct colors. The minute hand is silver and the hour hand is gold (paint, alas!) It now occupies a prominent place in the office. It is worth taking this time...

The US dollar traded heavily in the holiday-shortened week.  It slipped against all the major currencies.  The recovery in commodity prices, the new stimulus Chinese officials suggested, and the relatively high yields conspired to help lift the dollar-bloc currencies.  Them and the Swedish krona fared best.  Sterling, the Swiss franc, and Japanese yen managed to eke out small gains.   The economic calendar is light in the week ahead, and participation will be as well.  Nevertheless, it...

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Every week, I strive to shed light on one issue, idea, or problem with the dollar and its central planner, the Fed. I develop concepts, make assertions, show my logic, and provide evidence. In short, I appeal to reason. It’s often abstract and always hard work to read. For the Christmas holiday, I thought I would appeal to emotion with some classic music and fun satire.[embedded content]

The French-speaking city of Sion in canton Valais is undergoing a transportation revolution – it is to be the first place in Switzerland with driverless buses. (SRF/swissinfo.ch) Two autonomous buses are set to do the rounds, firstly without passengers in a closed off area. Next spring, passengers will also be able to hop onboard. For a two-year trial period, the buses carrying up to nine passengers each will cover tourist routes in Sion's Old Town. The shuttle system is the brainchild of...

The thinness of the order-driven capital markets is making price action that seems more inexplicable than usual.  The US dollar is mixed. It has recouped all the ground it lows against the euro yesterday, as the single currency briefly dipped below $1.09 in the North American morning.  It was unable to build on yesterday's gains that had carried it up to almost $1.0950.   Despite some fraying, the $1.08-$1.10 trading range still seems intact.   Sterling which had been sold to eight-month...

Many Swiss ski resorts are dealing with a lack of snow because of relatively warm winter temperatures, and only those with artificial snow are managing to open ski slopes as usual. (SRF/swissinfo.ch) Some of the higher resorts in the south-western canton of Valais are open for ski business. St Moritz in eastern Switzerland, with only 15cm of snow on its higher pistes, is issuing visitors with a list of 400 things to do if it does not snow, including skating and taking in a little local...

1.  China's Central Economic Work Conference is responsible for setting the annual GDP target. Although it was not formally announced, President Xi previously indicated that the goal for the economy to expand by around 6.5% a year through 2020.  More telling than the GDP target is the intentions expressed in the new slogan:  flexible monetary policy, forceful fiscal policy.  For Chinese officials, these are not ends in themselves but means to another end.  In this case, the goal is to...

Soggy Dollars There’s this article, saying rising rates are good for gold. It repeats two old errors: gold goes up, and things that cause it (e.g. a collapsing paper currency) are “good”. We have recently been emphasizing that interest does not correlate well with the price of gold. If you want to speculate on the gold price, rising rates may not be a good trading signal. Pure Gold Please forgive us once, the sin of linking an article by our own Keith Weiner. Keith argues that Yellen is...

On Wednesday Dec 16, Federal Reserve Chair Janet Yellen announced that the Fed was raising the federal funds rate by 25 basis points. Let’s get one thing out of the way. This is not a move towards free markets. Whether the Fed sets interest lower, or whether it sets interest higher, we still have central planning. We still have price fixing of interest rates. Interest rates may be set too low. However, forcing interest up is no cure. We need to eliminate central planning, and move to a free...