“De repetirse los resultados de las Paso en noviembre, entre otras cosas, el oficialismo perdería seis senadores quedándose sin quorum propio y, a eso, lo consideran muy peligroso. Si no recuerdo mal, el peronismo siempre ha tenido mayoría en el Senado desde la vuelta de la democracia en 1983. Además, en mi opinión, hace mucho ruido la fuerza con que surgió inesperadamente Milei, con un discurso muy contrario a las ideas gobernantes y a los políticos. La anti política, casi anti-Estado que gana fuerza en todo el mundo.”

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“For decades the industrial sector in Argentina has had very little weight because the State not only takes away work capacity with so many regulations -limitations and prohibitions-, but also takes away large resources through taxation and takes almost all the financial resources.”

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“Give the markets time to digest the contextual basis of jobs and see if Powell’s concerns are realized in the August data and that employment remains well below the FED‘s mandate of full-employment. If the DATA is weak expect the DOLLAR to weaken, GOLD TO RALLY, BONDS TO ATTAIN some strength as it will push back the central bank’s desire to CURB ITS ASSET PURCHASES. It’s also LABOR DAY WEEKEND so be very patient as trading will not be as liquid as desks will be vacant due to the holiday. PATIENCE FOR THE NARRATIVE TO UNFOLD.”

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” Uncertainties are growing again in financial markets because, predictably, politicians are not willing to disarm the power they won – state controls and restrictions – with the excuse of the “pandemic” and, therefore, the global economic recovery slows.”

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“Hoping you have a great week but wish to remind traders that after last Sunday night’s meltdown in the GOLD and SILVER, the GOLD CLOSED HIGHER ON THE WEEK, even as the FED‘s language grew more hawkish in terms of beginning QE tapering. The U.S. DOLLAR also failed to rally after the initial GOLD bashing, the dollar index closing lower on week. The hawkish rhetoric failed to provide lift to traditional vehicles of positive dollar asset classes.

This is just something to watch even as global sovereign BOND markets remained in nominal real territory: German Bunds -0.46%; French Oats -0.13%; Netherlands -0.34%; Greek 0.55%; and Italy 0.54%.

Of course the BOJ, RNBZ, RBA and BOE all have interest rates on overnight money near zero. This is the predicament for the FED in being the the first to remove liquidity. Interest rates are low everywhere and the BOJ and ECB have openly stated their reticence to begin pulling back asset purchases. This is the global financial system with which we go back to beach. Will the SRF allow the FED to reduce QE without leading to a DOLLAR RALLY? Only time will tell.”

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” Cuenta Ezequiel Burgo que la inversión extranjera directa en Argentina registra los niveles más bajos desde la crisis de 2001. Según el BCRA, hasta junio de 2021 ingresaron US$ 748 M al país durante los últimos doce meses en concepto de ‘inversión directa de no residentes’. Una cifra francamente irrisoria y que, obviamente, se debe a casos muy puntuales y de mantenimiento de emprendimientos ya existentes mostrando que en el fondo hay desinversión en Argentina.”

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“The noose tightens for a strong DOLLAR will create havoc on so many of the world’s most vulnerable economies. When does not fault of their own splash across the OCEANS? Those espousing an end to the global reflation trade due to FED policy pivoting be very cautious. All those in favor of a strong dollar raise your hands, otherwise keep the MUSIC PLAYING AND THE WALL STREET CROWD KEEP DANCING. Hey Joe, you may wish to change partners.”

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45 min Podcast – Link Here

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“The problem remains that the FED bent to the consultations of this illustrious non-elected group with potential for great financial impact. It further confirmed my hypothesis that the FED cannot lead the move to end QE but must be a laggard or suffer the consequences of an overly strong DOLLAR.”

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“If inflation keeps accelerating beyond their 2.5% per annum expectation, which in our view is guaranteed, increases of 1/4% in Fed funds will be implemented on a quarterly basis. Then monthly. There is a long way to go, and a long time necessary, to reach a funds rate of just 2.5%, the last peak (2019). And, dear reader, that won’t cut it when inflation is running 500 to 800 basis points higher. It’s useless for us to speculate any further. It will be a long time, measured in years, before the Fed regains control of prices. During this long period of time, inflation will rage and consumer purchasing power will shrink as wages struggle to keep up with prices. Economic activity will be severely affected by this loss of purchasing power, and slowdowns and recessions will follow. Corporate margins will shrink. Price controls, always useless and counterproductive, will almost certainly reappear on the scene. The evils of social inequality will be compounded, and social unrest will follow… There are very few places to which we will be able to escape and find safety in the coming financial and economic disaster. But recognizing the problem is the first step and we believe that we have recognized it.”

Link Here to the Quarterly Report

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”  Como venimos anticipando, por ejemplo, en la nota “La economía argentina en situación muy complicada”, la inflación global está tomando un vuelo muy importante (y, por cierto, hay un gran negocio dentro de esto, ya que implica billones de dólares emitidos y regalados a los amigos del poder, que explica buena parte de la “pandemia”).”

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“IF THE FED IS THE FIRST MOVER OF THE MAJOR TO RAISE RATES AND CUT QE THEN THE DOLLAR WILL RISE BECAUSE OF THE MASSIVE AMOUNT OF GLOBAL DOLLAR-DENOMINATED DEBT. A rise in the DOLLAR would lead to declining profits for U.S. multinational corporations, as well as emerging markets having to raise capital thus initiating a global liquidation of various assets. This would naturally mean a correction in equity markets. I guess we’ll see this week as we get another FOMC meeting and Powell press conference.”

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“This is it. They can’t raise rates too soon because there’s too much debt, which has been supported by massive asset purchases instituted by all the world’s major central banks.”

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“The foundations for where we are today were laid in 1998. The book explains where our current predicament came from and how the financial repression we now live with is a fusion of the two forms of capitalism, social capitalism and financial capitalism, that did battle in Asia in 1997 and 1998.”

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“While traders are certainly cautious there is NO PANIC. The primary difference from 16 months ago is of course the FED having moved to the ZERO BOUND so yields are just too low at this juncture to attract those in search of a haven at any price. The critical question remains: IF THE ONSET OF THE DELTA VARIANT INCREASES GEOMETRICALLY, WHAT WILL BE THE RESPONSE OF THE MONETARY AND FISCAL AUTHORITIES? WHAT TOOLS REMAIN IN THE BOX? THESE ARE THE CRITICAL ISSUES CONFRONTING ALL INVESTORS WITH U.S. RATES AT ZERO.”

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” ironically, as bulk food prices fall, many experts, such as Michael Snyder, recommend hoarding food from supermarkets: “For decades, Americans have not had to worry about food prices… Our supermarkets have always been full, and prices would always be roughly the same. Unfortunately, things are changing…”.”

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“Do China and Russia have state authorities investing in the markets?

If the answer is yes then global investors have many issues to consider. The use of massive amounts of leverage (perfectly legal) utilized by Sovereign Wealth Funds and national pension funds have the power to distort prices as much as the involvement by the FED, ECB and BOJ to cause major distortions in the credit markets ..  THE FED MAY NOT BE THE ONLY GAME IN TOWN.”

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Link Here to the English Version

“El repunte de la inflación a nivel global sin dudas afectará a la Argentina, aunque mucho más graves son sus problemas internos. Sucede que, los astronómicos programas fiscales proporcionados por las economías más potentes están inflando los precios globales de manera importante. La suba del IPC (consecuencia de la inflación) en EE.UU. durante mayo alcanzó el 5% interanual, mucho para un país desarrollado y, sin dudas, esto recién comienza. Aunque, por otro lado, la ralentización en el crecimiento económico provocará cierta baja en los precios (el IPC) a pesar del aumento de la inflación (devaluación intrínseca de la moneda por exceso de emisión).”

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