“STOP DEPENDING ON EQUITY MARKETS AS THE TELL IN FINANCIAL CONDITIONS it is a methodology promoted by the purveyors of asset peddling. PAUSE AND TAKE A MEASURE OF THE FINANCIAL UNCERTAINTY INFECTING THE GLOBAL FINANCIAL SYSTEM. The political backlash you will be facing from those warning about how workers will pay the price in unemployment while the RENTIERS GET BAILED OUT. It is FIRST REPUBLIC ON THE BOIL NOW BUT WITH LESS LENDING AND HIGHER RATES ON THE HORIZON THE COMMERCIAL REAL ESTATE LENDERS WILL BE NEXT. IS 25 BASIS POINTS WORTH IT? Where is your cost-benefit analysis?”
Media
03/21/2023 - Yra Harris – How Many `Whatever It Takes’ …
03/21/2023 - George Gammon – Biggest Rate Decision in History
03/06/2023 - Legendary Global Strategist Chris Wood
02/27/2023 - Russell Napier on Financial Repression
02/05/2023 - Former Glencore CEO on ESG and Sustainability
01/31/2023 - Daniel Lacalle – Gold Soars and Precious Metals Rise on Money Destruction
01/09/2023 - Zoltan Pozsar Essay Links on War and …
- War and Peace (11 mins)
- War and Interest Rates (26 mins)
- War and Industrial Policy (24 mins)
- War and Commodity Encumbrance (23 mins)
- War and Currency Statecraft (17 mins)
01/06/2023 - Daniel Lacalle – Digital Currencies, Global Control. Recession, Lat Am Lost Decade and Price Controls
01/03/2023 - Daniel Lacalle – Global Debt Crisis in 2023?
12/19/2022 - Louis-Vincent Gave on Brazil Media – in English after short Portuguese Intro
12/19/2022 - Louis-Vincent Gave – Investment Themes for 2023
11/29/2022 - Yra Harris – Cui Bono? (Who Stands to Gain?)
“The QE program fomented by Ben Bernanke in response to the 2008 financial crisis ran interference for the ECB, BOE, BOJ and others so as to prevent their currencies from rapidly appreciating against a DOLLAR. That is, massive amounts of liquidity were injected into the financial system to “forestall” deflation. The US and Europe experienced a deflation but the FED allowed for all to keep the monetary spigots wide open. The only country that experienced actual deflation was/is Japan. Now that global inflation is the result of massive liquidity infusions the question remains how to extract the liquidity without causing too much stress on a global system awash in QE-fueled debt.
The FED seems to be intent on raising rates ever HIGHER in an effort to break inflation, but maybe it’s time to halt the rate rises and increase the pace of the balance sheet runoff? This is the prevailing question as we head into 2023, but for us we will rely on the wisdom of Louis Gave : We adapt, not forecast.
Last week, Bank of Austria President and ECB Board member Robert Holzmann said in a Financial Times story he favored a 75 basis point increase at the next meeting in December. But Holzmann also warned that it is imperative that the ECB begin shrinking its BOND PORTFOLIO “before it had finished raising rates, adding that it is important to avoid short-term borrowing costs rising above long-term ones.” Holzmann wants to avoid an inverted yield curve because “it would be a challenge for Europe’s banking sector, which relies on being able to borrow cheaply in the short term to make longer-term loans at higher rates.” As Holzmann said, “We have to make sure it doesn’t get to that point.”’
11/28/2022 - Felix Zulauf – Latest Thoughts
11/27/2022 - Daniel Lacalle – COLLAPSE. EUROPE ENERGY CRISIS GETS WORSE
11/21/2022 - Yra Harris – Recapping the Last Two Weeks
10/26/2022 - Economist Nouriel Roubini on the Economy and the USD
08/28/2022 - Dr. Albert Friedberg Quarterly Report
“Until the Fed shows some understanding of the issues here discussed and until they move to implement policies that will remove inflationary pressures and incentives to misallocate resources, we see no need to abandon our investment stance. It can be summed up as bullish on inflation and not bullish on growth.”
08/17/2022 - Yra Harris – Neutral
“he EQUITY markets have recovered more than 50% of their first-half losses stoking the call from WALL STREET that it is all clear WEENA. BUT I CAUTION: This is not an INVESTING MARKET BUT TRADING MARKET as we await to hear from Chair Jerome Powell on the FED‘s future path, especially as the central bank’s balance sheet reduction ramps up to its maximum levels next month. NOBODY can be certain of the impact of removing liquidity from what has been an over-leveraged market living on the liquidity drug provided by QE.”
08/03/2022 - Charles Hugh Smith – A Rising USD and Geopolitical Risks/Aims
08/02/2022 - Yra Harris – We’re Back?
“The strong dollar is not a blessing in these tumultuous financial conditions as it places a great deal of stress on the world’s emerging markets, which are BORROWED in US DOLLARS due to the FOMC’s flooding the global system with very low interest possible loans. Cheap dollar loans become expensive when interest rates rise and the cost of DOLLARS rise along with it. A classic case of this was in January 2015, when Eastern European countries borrowed in Swiss francs because of low Swiss interest rates coupled with a guaranteed level of euro/Swiss franc at 1.20, A NO BRAINER.
But when the Swiss National Bank could no longer hold the PEG the market panicked and the SWISS FRANC rallied in dramatic fashion, leaving borrowers stuck having to repay with expensive Swiss francs. This is the current situation confronting the massive amount of loans held by private and public emerging borrowers with prior cheap dollar loans. This is just the beginning of this important discussion. ”