Tag Archives: Deflation

We’ve got to change our ornithological nomenclature. Hawks become doves because they are chickens underneath. Doves became hawks for reasons they don’t really understand. A fingers-crossed policy isn’t a robust one, so there really was no reason to expect the economy to be that way. In January 2019, especially the past few days, there are so many examples of flighty birds. Here’s an especially obvious, egregious one...

The enormous setback hadn’t yet been fully appreciated in March 2012 when China’s Premiere Wen Jiabao spoke to and on behalf of the country’s Communist governing State Council. Despite it having been four years since Bear Stearns had grabbed the whole world’s attention (for reasons the whole world wouldn’t fully comprehend, specifically as to why the whole world would need to care about the shadow “dollar” business of...

A major theme of Keith’s work—and raison d’etre of Monetary Metals—is fighting to prevent collapse. Civilization is under assault on all fronts. The Battles for Civilization There is the freedom of speech battle, with the forces of darkness advancing all over. For example, in Pakistan, there are killings of journalists. Saudi Arabia apparently had journalist Khashoggi killed. New Zealand now can force travellers to...

The US yield curve isn’t the only one on the precipice. There are any number of them that are getting attention for all the wrong reasons. At least those rationalizations provided by mainstream Economists and the central bankers they parrot. As noted yesterday, the UST 2s10s is now the most requested data out of FRED. It’s not just that the UST curve is askew, it’s more important given how many of them are. Look to our...

Chinese exports rose 12.9% year-over-year in April 2018. China Exports, Jan 2008 - Apr 2018(see more posts on China Exports, ) - Click to enlarge Imports were up 20.9%. As always, both numbers sound impressive but they are far short of rates consistent with a growing global economy. China’s participation in global growth, synchronized or not, is a must. The lack of acceleration on the export side tells us a lot...

In the early throes of economic devastation in 1931, Sweden found itself particularly vulnerable to any number of destabilizing factors. The global economy had been hit by depression, and the Great Contraction was bearing down on the Swedish monetary system. The krona had always been linked to the British pound, so that when the Bank of England removed gold convertibility (left the gold standard) from its...

Whether or not San Francisco Fed President John Williams is right about US inflation and employment being about as close to the central bank’s targets as investors have seen – as he told CNBC two days ago – is irrelevant: The central bank is going to raise interest rates two more times this year no matter what happens to consumer prices, says Credit Suisse Chief Investment Officer for Switzerland Burkhard Varnholt....

Unberechenbare Preisentwicklung: Noch ist unklar, ob sich die Situation normalisiert. (Bild: Reuters/ Edgar Su) Die Weltwirtschaft erholt sich in raschen Schritten. Konjunkturauguren revidieren erstmals wieder ihre Wachstumsprognosen nach oben, ein Phänomen, das es seit bald zehn Jahren nicht mehr in dieser Form gegeben hat. Frühindikatoren, wie die Einkaufsmanagerindizes, fallen seit Monaten sehr kräftig aus. Selbst die Unternehmensinvestitionen – lange Zeit das grösste Sorgenkind der...

The reflation trade that started before Donald Trump’s victory in the US presidential elections accelerated in Q1 as global economic data improved and surprised against expectations. Global equities are up 6.5% in dollar terms with markets such as Hong Kong, emerging markets, and Brazil the clear outperformers. In its Q2 2017 Outlook report, Saxo Bank warns that the reflation trade will end in Q2 with a healthy correction in global equities.   The biggest perception-versus-reality...

Here are two different looks at Fed rate hikes since Volcker. The charts are the same, but one presentation is a lot funnier than the other. Federal Funds Target RateThe above image from the New York Times article A History of Fed Leaders and Interest Rates. - Click to enlarge Here’s an alternative view courtesy of @HedgeEye. - Click to enlarge Let’s take the fist chart and see what correlations exist between...