The Continuum (the systematic downtrend in long-term Treasury yields) has for decades given the Fed the green light on inflation. Sometimes it runs hot (as per the red arrows) and sometimes it runs cold. One year ago people were confused about why a declining stock market was not influencing Fed chief Powell to reverse his relatively hawkish tone. Full Story
In the past two months the Bank for International Settlements, which represents most central banks in the world, has nearly doubled its gold swaps and derivatives position, the bank's October and November statements of account show.
The BIS uses gold swaps and other gold derivatives to gain access to gold held by commercial banks. As of November 30 the bank's swaps and derivatives, estimated at 250 tonnes, were at their highest level since February. But the recent levels are still much reduced compared compared to those of the second half of 2018. Full Story
By: Keith Weiner, PhD, Monetary Metals - 18 December, 2019
The Fed centrally plans the single most important price in the economic universe: the price of credit. Specifically, overnight credit. This is an awesome power (which no one should possess). However, there is a limit to this power. The price of long-term credit is subject to market forces, and they interact with the force applied by the Fed to create a dynamic. This dynamic is characterized by positive feedback. That is, the system tends to run and run in one direction for decades.
When Volcker was appointed in 1979, the trend of rising interest and rising prices had been going on since the end of WWII. Here is a graph of the Fed Funds Rate, the rate dictated by the Fed. It begins in 1954 (the earliest data the St Louis Fed provides in this series). Full Story
By: Richard (Rick) Mills, Ahead of the herd - 16 December, 2019
This week Slovakia and Poland became the latest European Union countries to call for a repatriation of their gold, which has been stored in Bank of England vaults for decades. Gold reserves owned by Poland and a number of other East European nations were spirited off to London at the outbreak of World War II, amid fears they would fall into the hands of Nazis.
On Thursday the former prime minister of Slovakia called on the country’s parliament to repatriate its gold from the UK because it can’t be trusted with the precious metal.
“You can hardly trust even the closest allies after the Munich Agreement,” said Robert Fico Full Story
… you have to wonder if he meant everything about the story was wrong — even the fact that there is now a deal in place? He did say “completely” wrong. When you start analyzing all the Trump Admin. and China have put out in the past two days, it looks like that is the truth: this is completely a No-Deal Deal in which the US got nothing solid. But it got it just in time for Christmas — just in time to avoid crashing hopes of a “Santa Clause rally” with new tough tariffs — and that is, I think, what matters here — to the stock market and, hence, to Trump and to some extent to the economy. The No-Deal Deal won’t make the moribund economy better, but it will keep Trump from making it worse by having to follow through with his threat of a whole new set of tariffs. Full Story
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