“The U.S. Treasury also wants to keep its borrowing costs as low as possible. One potential fundamental lifting bonds is if Congress does not agree on the massive stimulus package proposed by the Biden administration. But any failure of increased stimulus would see the stock market also correct as anticipation of stimulus gave way to disappointment. The S&P/BOND simple relationship, which has served us well over the last 25 years, should continue to be an important chart. DO YOUR WORK for the chart has been a key barometer of critical turns in the market — specifically October 2017 and October 2018.”
06/07/2021 - Yra Harris: Schauble Pivots, Brainard Postulates
06/03/2021 - Sustainability in Art and Architecture with Prince Charles, Countess Chiara, Juan Yarur and Alec Oxenford
05/31/2021 - Alejandro Tagliavini – What the stock markets look like
“Most analysts estimate that Wall Street is oversold in the short term, even so, the rallies on Thursday and Friday were to be expected given that it was coming from several negative days in a row. But upside potential remains limited, as Lance Roberts estimates, although we can still see a relative rally for the S&P 500 and the Nasdaq over the next week. But a more extensive correction is expected this summer as markets are in an exceptionally long stretch without an expected 5% correction, so the odds are increasing.”
05/29/2021 - Tad Rivelle: Inflation is Already All Around Us
“The US system of finance was tested in 2020, the economy was tested and it survived the test which means that for now the reserve currency status of the Dollar is unquestioned – and that’s used for justification to continue the same policies. But there will be a point where people no longer can trust you to the same degree which runs the risk of a more generalized inflation and maybe a more generalized rebalancing away from the Dollar.”
05/28/2021 - Yra Harris: Precious Metal-backed Chinese CBDC?
“The idea of a STABLECOIN has been thrown around but she is the first one to define it: “A stablecoin is a type of digital asset whose value is tied in some way to traditional stores of value, such as government-issued, or fiat, currencies or gold. Stablecoins vary widely in the assets they are linked to, the ability of users to redeem the stablecoin claims for the reference assets, whether they allow unhosted wallets, and the extent, and the extent to which a central issueris liable for making good on redemptions rights. Unlike central bank fiat currencies, stablecoins do not have legal tender status.”
This is earth-moving comments from a FED governor. The mention of a GOLD-BACKED CBDC is what we at NOTES have been discussing as a Chinese move to disrupt the international order. Here we have Brainard raising the issue of a possibility of precious metals ensuring the value of the FED‘s stablecoin with an underlining value anchor. If the Chinese were to fulfill the role of Revisionist Power rather than status quo power what better way then to be first mover to a SILVER- or GOLD-backed CBDC. This is a very serious issue raised by a powerful voice on the Federal Reserve. Failure to be attentive will not serve the global investment world well. The DYNAMISM of GLOBAL FINANCE lies far beyond the walls of WALL STREET.
05/25/2021 - The Roundtable Insight – Piet Viljoen and Yra Harris on Financial Repression
05/24/2021 - Yra Harris: To Russia With Love (Or Blinken Blinked)
“It seems like yesterday that Secretary of State Antony Blinken was asserting the U.S. to place even more sanctions on Russia as his boss was calling Vladimir Putin a thug and a murderer. The Russians took advantage of the “good news” and issued a long delayed bond offering and sold close to $2 billion of five- and 10-year debt. Also, if the removal of sanctions is indicative of more positive things to come, watch the ROUBLE, which has closed above the 200-day moving average for the last few days. I have remained long of RSX, the Russian fund for the past few years as it provides a solid yield but is far too heavy with energy/fossil fuel. Plus, the Russian central bank is helmed by one of the best bankers, Elvira Nabiullina.
The Biden administration is courting Russia for either an attempt to get greater support for a new Iran deal or, as some of NOTES readers have suggested, trying to move Russia a bit further away fro China. These are good conjectures as is also the idea that the U.S. is trying to repair some of the ill will with Germany created by the Trump administration. Given the way the DAX closed against the SPOOS it may be that repairing relations through removing sanctions on Russia will help generate greater economic activity in Germany. The S&P/DAX closed below the 200-day moving average.”
05/21/2021 - Admitting Bitcoin’s Environmental Flaws
“The carbon emissions of bitcoin are not just Elon Musk’s problem. As much as bitcoin fans hate to admit it, Satoshi’s currency was built on an inefficient mechanism and must give way to alternative protocols. Time for a greencoin to emerge from the dust?”
05/20/2021 - The Roundtable Insight – Charles Hugh Smith on the Era of Accelerating Expropriations
05/18/2021 - Alejandro Tagliavini – Global inflation rises and, by the time being, falls in Argentina
” If this inflation took time to transfer to prices – and that is why the CPI is now skyrocketing – it is due to the government’s repression on the exchange market and many prices – some subsidized – repression that, ironically, produced a drop in the increase of the production given the lack of profitability, ergo, a decrease in the demand for money, that is, a real inflation boosted.”
05/17/2021 - Yra Harris: Is the Fed In a War?
“Did the Chinese outwit the global actors in a quest to protect their paper assets? The answer may cause a shift in our views about the present rise in commodity prices. There was a Reuters article on Friday titled, “U.S. Tariff Review Considers Commodity Shortage, Inflation–Official.” This discussion is laughable for the U.S. imports almost zero commodities from China so why would that be the area of concern?
The strengthening YUAN would be a far better barometer of Chinese impact on global raw material prices. There’s lots to think about but watch the long-end of the yield curve to discern market action. If the FED chooses like Bartleby the Scrivner not to play then how STEEP can the yield curve go. When Paul Volcker was FED chair he INVERTED the yield curve to more than 600 basis points in an effort to crush inflation. How steep will the FED allow the CURVE to rise in an effort to hit its inflation target?”
05/11/2021 - Yra Harris: SIN or WIN, It’s a Generational Thing
“Put on your S.I.N. buttons and drive the FED to YIELD CURVE CONTROL, the mother of all tools in the YELLEN/POWELL toolbox.”
05/06/2021 - The Roundtable Insight – Dr. Marc Faber and Yra Harris on the Economy, Geo-Political Risks and Investing
05/05/2021 - Alejandro Tagliavini – ¿Cómo sigue el dólar?
” La divisa estadounidense ampliaba sus ganancias este martes en los mercados globales, anulando en parte un declive de un mes, ante el menor apetito por el riesgo y mientras los inversores esperaban los próximos datos y discursos políticos. Ante la cautela reinante, los principales índices de acciones bajan y avanzan levemente los retornos de los bonos gubernamentales, con lo que el atractivo del billete verde aumenta, describían desde de Scotiabank.”
05/03/2021 - Yra Harris: Pay Attention to the Value of the Yuan
“Pay attention to the value of the YUAN as it is the linchpin to an attack of the sanctimonious nature of U.S. power and influence. I have opined for three months that it was the strengthening YUAN that was leading the rally in global commodity prices.”