Tag Archives: newsletter

Die letzten Tage wirkte es, als hätte der Bitcoin einen stabilen Support in der Nähe von 40.000 US-Dollar gefunden. Doch gegen Ende der Arbeitswoche ging deutlich runter – der Kurs verlor in der Spitze fast 15 Prozent. Der gesamte Markt folgte dem BTC-Trend. Bitcoin News: Bitcoin verliert erneut an BodenHeute sind es immerhin noch ungefähr 7 Prozent Kursminus im Wochenvergleich, so dass der Bitcoin aktuell nur noch 36.000 US-Dollar wert ist. Der gesamte Markt verlor...

The Fed's 50 bp rate hike is behind us.  Another 50 bp hike is expected next month. The April employment report will do little to calm the anxiety about the "too tight" labor market.  The decline in the participation rate was disappointing and this coupled with decline in Q1 productivity raies questions about the economy's non-inflationary speed limit.    One of the fascinating things about the markets is that sometimes the cause take place after the effect.  This...

What if all the new consensus memes are as wrong as the ones they replaced? I have the Contrarian Curse, and I have it bad. The Contrarian Curse is: as soon as the herd adopts your previously contrarian view, you start questioning the new consensus, just as you questioned the previous consensus. Example #1: fiat currencies are doomed. After all, if creating “money” out of thin air solves all our problems, why not just let everyone print as much as they want at home?...

It’s never just one thing or another. Take, for example, collateral scarcity. By itself, it’s already a problem but it may not be enough to bring the whole system to reverse. A good illustration would be 2017. Throughout that whole year, T-bill rates (4-week, in particular) kept indicating this very shortfall, especially the repeated instances when equivalent bill yields would go below the RRP “floor” and often stay there for prolonged periods. There was, as I wrote...

Washington regards the entire world as its “sphere of influence.” But now Beijing is looking to follow the US playbook on hegemony and expand Beijing’s network of military bases abroad. Original Article: “Expect Washington to Throw a Fit over China’s New Deal with the Solomon Islands” Over the past twenty years, the United States has increasingly tried to claim that Washington does not believe in spheres of influence and that only supposedly imperialist states...

The electricity prices reflect the supply and demand conditions in Europe and interfering with the price formation mechanism would have dangerous consequences. Since the end of 2021, we have witnessed unprecedented price levels in the European electricity markets, with an increase in electricity prices by 200% within less than a year. This tense market situation was further perpetuated by geopolitical events, namely the Russian invasion of Ukraine, impacting gas...

The Swiss National Bank is not prepared to release any further reserves. Keystone / Martin Ruetschi The Swiss National Bank (SNB) continues to beat off demands to fight inflation by raising interest rates and to distribute more reserves to cantons and other causes. SNB president Barbara Janom Steiner showed signs of frustration in a speech on Friday that defended the policies of the central bank. “There are ever more varied proposals – and indeed, increasingly,...

The FOMC meets next week, with everyone everywhere expecting a 50 bps rate hike to be announced on Wednesday. Yesterday’s “unexpected” and “shocking” negative GDP is unlikely to deter anyone on the committee. Most have already dismissed it as nothing more than quirky, temporary factors, not unlike when they did the same to Q1 2014’s similarly negative result. At least that one had the Polar Vortex (uh oh). Jay Powell’s group can’t see beyond the US border, doesn’t...

The conventional view among mainstream economists, as presented by Milton Friedman, is that three factors determine market interest rates: liquidity, economic activity, and inflationary expectations. In this viewpoint, whenever the central bank raises the growth rate in the money supply by buying financial assets such as Treasurys, this pushes the prices of Treasurys higher and their yields lower. Note that this is the monetary liquidity effect, which inversely...

Since 2008, a key component of Fed policy has been to buy up mortgage-based securities and government debt so as to both prop up asset prices and increase the money supply. Over this time, the Fed has bought nearly $9 trillion in assets, thus augmenting demand and increasing prices for both government bonds and housing assets. Moreover, these purchases were made with newly created money, contributing greatly to liquidity and the easy-money policies that have...