While the orthodoxy continues to try to reassure everyone that the economy is still moving to plan, revised innumerably over the years imperceptible as progress has been, there are signs that even mainstream outlets are at least starting to question whether or not that is actually preferable. Not a lot of dots are connected yet, and certainly not from A [...]
What follows here, in the interest of full disclosure, is nothing more than speculative conjecture on my part. This is due mostly to the opacity that dominates gold “markets” and trading oddities that follow from it. My thoughts here are based on gut instinct about recent observations, but that is about as much to solidify any analysis as can be [...]
Home country bias is the tendency for investors to focus more on their domestic economy and markets. For most of the people reading this the US markets are home and with the Dow breaking 17,000 this past week the US is certainly getting a lot of attention. And it deserves it I guess considering the huge run up in US [...]
The positive price action in gold of the last few weeks stands out in sharp contrast to other sectors of the funding market, particularly repo. Under last year’s defiling paradigm, such a collateral shortage as pronounced as what we see now would have been disastrous for gold prices (more collateral demand typically leads to an increase in gold “leasing”, which [...]
In the 1920’s, it was the interruption of the distribution of gold flows via sterilizations and the creation and maintenance of foreign “reserves” and influencing the nascent wholesale markets of the age that served to maintain a high degree of leverage throughout the economy. That it did not show up in consumer prices is only due to the nature of [...]
After building up billions of dollars in reserves placed through NYC banks into Street loans, or call money, the crash of ’29 created a profound disturbance in not just stocks but banking. Here too we get little mainstream examination into the link between stocks and the liquidity event that unleashed at least three discrete and successive waves of bank failures; [...]
A full part of gold sterilization meant not just maintaining the total level of liquidity (though ignoring the distribution) but also in foreign “reserve” balances. The movements of gold created a trail of foreign exchange “reserves” which central banks around the world were using as tools to affect currency movements contravening of any gold pull or push. It was the [...]
The conventional view of asset bubbles is that they are difficult to discern even after the fact. The current policy position is one of bubbles that are “obvious.” Looking back at the late 1920’s, there is no doubt it took a similar track to that seen in the late 1990’s. But that, by itself, does not necessarily denote the presence [...]
Looking at the changing pattern of recoveries throughout domestic economic history, it is clear that there is a correlation between the level of monetarist intrusion and the shape of recovery (I would go so far as to claim a causative relationship, but at the very least there is no denying some kind of link). That observation extends to the 1930’s [...]
The explanation given for the increase in participation at the reverse repo “window” in mid-April was taxes. In other words, the payment of quarterly and annual estimates and billings reduced the need for the federal government to borrow. Since the variability in borrowing amounts is taken up in t-bills, the relative scarcity of on-the-run t-bills has left the market somewhat [...]
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