Tag Archive: Federal Reserve

Sweden’s Gold Reserves: 10,000 gold bars (pet rocks) shrouded in Official Secrecy

2017-04-28

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2017-04-28

In February 2017 while preparing for a presentation in Gothenburg about central bank gold, I emailed Sweden’s central bank, the Riksbank, enquiring whether the Riksbank physically audits Sweden’s gold and whether it would provide me with a gold bar weight list of Sweden’s gold reserves (gold bar holdings). The Swedish official gold reserves are significant and amount to 125.7 tonnes, making the Swedish nation the world’s 28th largest official gold...

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Where There’s Smoke…

2017-04-25

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2017-04-25

Evolution of Atlanta Fed GDP, December 2016 - April 2017
Central banks around the world have colluded, if not conspired, to elevate and prop up financial asset prices. Here we'll present the data and evidence that they've not only done so, but gone too far. When we discuss elevated financial asset prices we really are talking about everything; we're talking not just about the sky-high prices of stocks and bonds, but also of the trillions of dollars’ worth of derivatives that are linked to them, as well...

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FOMC Minutes Suggest Balance Sheet May Begin Shrinking This Year

2017-04-12

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2017-04-12

FOMC minutes increased likelihood that Fed will begin reducing its balance sheet late this year. There does not seem to be a consensus on other issues. The strength of the ADP report contrasts with softness seen in the ISM and PMI non-manufacturing surveys.

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FX Weekly Preview: A New Phase Begins

2017-04-10

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2017-04-10

There were no celebrations; no horn or trumpets, nary a sound, but an important shift took place last week. The shift was signaled by two events. The first was the US strike on Syria, and the second was investors' willingness to look past Q1 economic data.

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US Jobs: Who Carries The Burden of Proof?

2017-04-09

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2017-04-09

Belly of the Curve Gone Flat 2009-2017
The idea that interest rates have nowhere to go but up is very much like saying the bond market has it all wrong. That is one reason why the rhetoric has been ratcheted that much higher of late, particularly since the Fed “raised rates” for a third time in March. Such “hawkishness” by convention should not go so unnoticed, and yet yields and curves are once more paying little attention to Janet Yellen.

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We Need To Define The ‘Shadows’, And All Parts of Them; or, ‘Rising Dollar’ Kills Another Recovery Narrative

2017-04-07

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2017-04-07

Total Credit Market Instruments
JP Morgan’s CEO Jamie Dimon caused a stir yesterday with his 45-page annual letter to shareholders. The phrase that gained him so much widespread attention was, “there is something wrong with the US.” Dimon mentioned secular stagnation and correctly surmised it was the right idea if for the wrong reasons. He then gave his own which included a litany of globalist agenda items, including not enough access to mortgages.

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The Power of Oil

2017-04-02

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2017-04-02

Oil Prices WTI, May 2007 - 2017
For the first time in 57 months, a span of nearly five years, the Fed’s preferred metric for US consumer price inflation reached the central bank’s explicit 2% target level. The PCE Deflator index was 2.12% higher in February 2017 than February 2016. Though rhetoric surrounding this result is often heated, the actual indicated inflation is decidedly not despite breaking above for once.

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Five Keys to Understand Trump

2017-04-01

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2017-04-01

The election of Donald Trump as the 45th President of the United States surprised many people, even seasoned political observers and astute investors. He failed to win the popular vote but did carry the electoral college, which is how the US elects its chief executive. His victory is a bit of a Rorshcach test, where people project the issues that allowed Trump to succeed, with different observers making different claims.

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The Market Has Its Head Buried Deep In The Sand

2017-03-30

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2017-03-30

shutterstock
Several “black swans” are looming which could inflict a financial nuclear accident on the U.S. markets and financial system. I say “black swans” in quotes because a limited audience is aware of these issues – potentially catastrophic problems that are curiously ignored by the mainstream financial media and financial markets.

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Non-Randomly Surveying RMB

2017-03-23

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2017-03-23

PBOC RMB Liquidity Management 2014-2017
China’s central bank, unlike other central banks, is constantly active almost never resting. Because it is always in motion, the PBOC can seem to be “adding” liquidity at the very same time it might be “draining” it. Its specific actions should never be interpreted as standalone procedures related solely to some unknown policy stance. That is particularly true given that we know what their stance is and has been – neutral.

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Further Unanchoring Is Not Strictly About Inflation

2017-03-18

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2017-03-18

University of Michigan Surveys of Consumers Inflation Expectations, Jan 1990 - 2017
According to Alan Greenspan in a speech delivered at Stanford University in September 1997, monetary policy in the United States had been shed of M1 by late 1982. The Fed has never been explicit about exactly when, or even why, monetary policy changed dramatically in the 1980’s to a regime of pure interest rate targeting of the federal funds rate.

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Federal Reserve Hikes, but Changes Little Else

2017-03-16

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2017-03-16

Fed made mostly minor changes in the statement as it hiked the Fed funds rate for the third time in the cycle. The average and median dot for Fed funds crept slightly higher. There was only one dissent to the decision.

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FX Daily, March 15: Greenback Softens Ahead of FOMC

2017-03-15

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2017-03-15

The US dollar is paring yesterday's gains as the market awaits the outcome of the well-telegraphed FOMC meeting. In recent weeks, the combination of data and official comments have swayed market, which had previously anticipated a hike in May or June.

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Trump Administration Modifying Stance on Way to G20

2017-03-14

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2017-03-14

Confrontation with China has been dialed down. Criticism of the Fed has been walked back. There is less talk about the dollar. Employment data has been embraced.

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Same Country, Different Worlds

2017-03-10

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2017-03-10

China CPI PPI, February 2007 - 2017
To my mind, “reflation” has always proceeded under false pretenses. This goes for more than just the latest version, as we witnessed the same incongruity in each of the prior three. The trend is grounded in mere hope more than rational analysis, largely because I think human nature demands it. We are conditioned to believe especially in the 21st century that the worst kinds of things are either unrealistic or apply to some far off location nowhere...

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FX Weekly Preview: Four Sets of Questions and Tentative Answers for the Week Ahead

2017-03-06

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2017-03-06

The week ahead features the ECB meeting and the US February jobs report. The Reserve Bank of Australia meets, Europe reports industrial production, Japan reports January current account figures, and China reports its latest inflation and lending figures. We frame this week's discussion of the drivers in terms of four sets of questions and offer some tentative answers.

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FX Daily, February 28: Markets Little Changed as Breakout is Awaited

2017-02-28

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2017-02-28

The capital markets are becalmed, and the US dollar is in narrow trading ranges. Month-end considerations are at work, but the key event is much-awaited speech US President Trump to a joint session of Congress this evening (early Wednesday in Asia). The hope is that he provides the policy signals that allow the dollar to break out of its recent ranges.

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FX Weekly Preview: Macroeconomics and Psychology

2017-02-27

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2017-02-27

There is a broad consensus around the macroeconomic picture. The headwinds slowing the US economy in H1 16 have eased, and above trend growth in H2 16 appears to be carrying into 2017. Q4 16 GDP is expected to be revised to 2.1% up from 1.8%. Many economists appear to accept that a good part, though not all, of the decline in the estimated trend growth in the US, is a function of demographic considerations.

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Video: Interest Rate Differentials Increasing Financial Market Leverage To Unsustainable Levels

2017-02-25

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2017-02-25

We discuss the rate differentials between Switzerland, Britain, Europe, Japan and the United States and how this Developed Financial Markets carry trade is incentivizing excessive risk taking with tremendous leverage and destabilizing the entire financial system in the process in this video.

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Are Rate Hikes Bad For Gold?

2017-02-24

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2017-02-24

Federal Funds Target Rate
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. Let’s take the fist chart and see what correlations exist between rate hikes and the US dollar index.

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