Well, that was an ugly week. Of the six major assets we track, only one was up last week - REITs. Large and small-cap stocks - down. General commodity indexes - down. Gold - down. Bonds - down. The early part of the week was actually pretty calm but Thursday and Friday - especially that close on the low Friday [...]
Crude oil prices rose over 25% last week and as I sit down to write this evening, the overnight futures are up another 8% to around $125. Almost every other commodity on the planet rose in prices last week too, as did the dollar. Those two factors - rising dollar and rising commodity prices - mean the likelihood of recession [...]
It was all over the news last week. Inflation has arrived. The CPI was hotter than expected. The PPI was even hotter. Import prices were up and export prices were up more. It was impossible to miss the inflation story last week. Stocks got the message and sold off on the hot CPI and finished the week lower for a [...]
It seems Charles Dickens had a flair for 21st century economics all the way back in the 19th century. Writing in his book Little Dorrit (thanks to W Krauss for the reminder) he observed that credit systems tended to be, “…a person who can’t pay, gets another person who can’t pay, to guarantee that he can pay.” The first person [...]
As the “dollar” runs somewhat “tighter” again, it is not surprising to see the various global dollar short proxies struggle under the weight of what I think is a very serious transition. The Brazilian real and gold are related in that respect, so lower prices in each are intertwined and significant toward that interpretation. However, the severity of the real’s recent [...]
The problem with being long gold, or even a fan of gold as anathema to central bank “flexibility” in central planning, is that you are often reminded the messiness of its modern nature. Gold as money, properly understood, meant money as property which is why physical metal fit so well for maybe all of “civilized” human history. However, the unassailable [...]
The pestilence of the wholesale “money” system, the eurodollar standard if you will, is that the “dollar” is no longer anything like one and that these “markets” for it are not directly observable. That leaves observers and interested parties to gloss and gleam related second or third hand accounts, hopefully piecing together the right parts at the right time enough [...]
The credit market selloff that began without much notice has begun to draw attention. While there is some attribution to various FOMC members and their renewed hints at tapering, the current move began weeks before and spread quickly to a broad spectrum of dollar-related markets. Treasuries usually get most of the attention but it all begins in funding. While the [...]
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