Tag Archives: newsletter

With today’s gains, the price of Brent has nearly doubled from its lows in January. Of course, the price of oil is still less than half of levels that prevailed two years ago.  At the same time, many leveraged investors cast a jaundiced eye toward currency pegs.  Many have concluded that the Middle East currency pegs cannot be sustained. Through a combination of the moral suasion and the power of sovereign, Saudi...

08.06.2016 09:15  – FSO, Prices (0353-1606-00) Swiss Consumer Price Index in May 2016 For the third time in a row, prices in Switzerland increased against the previous month. Inflation was -0.4% against last year. Still in 2015 yearly inflation was mostly around -1.5% y/y. Now yearly HCPI inflation is -0.5%. Will this rising price tendency continue? It will be surely a problem for the SNB. They might need a stronger...

This posts shows again the stupidity of the financial media, that mixes up assets and liabilities for central banks.SNB FX reserves are assets. They are in different foreign currencies and subject to the valuation effect of these currencies.Our weekly sight deposits report show the liabilities. They are measured in Swiss franc and therefore not subject to valuation effects. They are the only way to measure...

Swiss Franc Once again both EUR and USD broke down against the franc. The adverse effect of the Friday US jobs reports is visible again.Moreover, CHF appreciated with the Asian block, with AUD and NZD and with the oil price. Swiss sales are pretty high to Asian countries. We also know that rising oil prices usually lead to a stronger CHF. Japan The Japanese yen is the major currency not to be gaining against...

  From Subject to Citizen BALTIMORE – June 5th, the Swiss cast their votes and registered their opinions: “No,” they said. We left off yesterday wondering why something for nothing never works. Not as monetary policy. Not as welfare or foreign aid. Not in commerce. Not never, no how. But something for nothing is what people most want. The Swiss voted against awarding all citizens a “universal basic income” of about...

07.06.2016 09:15  – FSO, Economic Surveys (0353-1605-60) Employment barometer in 1st quarter 2016 Employment growth, but only in tertiary sector Varying employment trends Neuchâtel, 07.06.2016 (FSO) – In the 1st quarter 2016 total employment (number of jobs) rose by 0.6% compared with the same quarter a year ago (0.0% compared with the previous quarter). In full-time equivalents, employment in the same period fell by...

Pro-BREXIT campaigners Boris Johnson (ex-mayor of London) and Michael Gove (UK Secretary of Justice) are in a good mood. Photo credit: Paul Grover / REX Polls Show Growing Support for a Break with the EU In the UK as elsewhere, the political elites may have underestimated the strength of the trend change in social mood across Europe. The most recent “You-Gov” and ICM pools show a widening lead in favor of a UK exit...

Groucho dispensing valuable advice Photo via imdb.com Destroying Lives BALTIMORE – A dear reader reminded us of the comment, supposedly made by Groucho Marx: “A free lunch? You can’t afford a free lunch.” He was responding to last week’s Diary about the national referendum in Switzerland on Saturday. Voters will decide whether to give all Swiss residents a free lunch – a guaranteed annual income of about $30,000 a...

Philipsburg, Montana, 1890: evidently, these gentlemen did not suffer from a silver shortage. Photo via mininghistoryassociation.org Surging Contango There are two views of the markets for the monetary metals. One, as we have discussed many times in this Report, holds that gold and silver will eventually go up so high that those who own the metals will be rich. This is the Schrodinger’s dollar view. Buy gold because...

Is it Time to Buy Income-Producing Real Estate?  No, No, No. Much to the dismay of my real estate buddies, who are complaining about how high prices while watching the cash flow of their portfolios bursting at the seams from a few good years of rent increases, the answer is no. Capitalization Rates REIT cap rates (as of mid 2015, they have declined further since then) Capitalization Rates Valuation is one big red...