- Gold – An Overview of Macroeconomic Price Drivers
Fundamental Analysis of Gold
As we often point out in these pages, even though gold is currently not the generally used medium of exchange, its monetary characteristics continue to be the main basis for its valuation. Thus, analysis of the gold market requires a different approach from that employed in the analysis of industrial commodities (or more generally, goods that are primarily bought and sold for their use value). Gold's extremely high stock-to-flow ratio and the main source of...
- India – Is Kashmir Gone?
Everything Gets Worse (Part XII) - Pakistan vs. India
After 70 years of so-called independence, one has to be a professional victim not to look within oneself for the reasons for starvation, unnatural deaths, utter backwardness, drudgery, disease, and misery in India.
Intellectual capital accumulated in the West over the last 2,500 years — available for free in real-time via the internet — can be downloaded by a passionate learner. In the age of modern technology, another mostly...
- Cracks in Ponzi-Finance Land
Retail Debt Debacles
The retail sector has replaced the oil sector in a sense, and not in a good way. It is the sector that is most likely to see a large surge in bankruptcies this year. Junk bonds issued by retailers are performing dismally, and within the group the bonds of companies that were subject to leveraged buyouts by private equity firms seem to be doing the worst (a function of their outsized debt loads). Here is a chart showing the y-t-d performance of a number of these...
- Pulling Levers to Steer the Machine
Ticks on a Dog
A brief comment on Fed chief Janet Yellen’s revealing speech at the University of Michigan. Bloomberg:
“Before, we had to press down on the gas pedal trying to give the economy all of the oomph that we possibly could,” Yellen said Monday in Ann Arbor, Michigan. The Fed is now trying to “give it some gas, but not so much that we’re pushing down hard on the accelerator.” […]
“The appropriate stance of policy now is closer to, let me call it...
- French Election – Bad Dream Intrusion
The “Nightmare Option”
The French presidential election was temporarily relegated to the back-pages following the US strike on Syria, but a few days ago, the Economist Magazine returned to the topic, noting that a potential “nightmare option” has suddenly come into view. In recent months certainty had increased that once the election moved into its second round, it would be plain sailing for whichever establishment candidate Ms. Le Pen was going to face. That certainty has been...
- Mea Culpa – Precious Metals Supply and Demand
Input Data Errors
I owe you an apology. I made a mistake. I am writing this letter in the first person, because I made the mistake. Let me explain what happened.
The wrong stuff went into the funnel in the upper left-hand corner...
I wrote software to calculate the gold basis and co-basis (and of course silver too). The app does not just calculate the near contract. It calculates the basis for many contracts out in the distance, so I can see the...
- The Cost of a Trump Presidency
Opportunity Cost Rears its Head
Last Thursday’s wanton attack on a Syrian air field by the US and its bellicose actions toward North Korea have brought the real cost of candidate Trump’s landslide victory last November to the forefront.
It didn't take long for Donald Trump to drop his non-interventionist mask. The decision was likely driven by Machiavellian considerations with respect to domestic conditions, but that doesn't make it any better.
- Heavily Armed Swamp Critters
GUALFIN, ARGENTINA – By our calculation, it took just 76 days for President Trump to get on board with the Clinton-Bush-Obama agenda. Now there can be no doubt where he’s headed. He’s gone Full Empire. Not that it was unexpected. But the speed with which the president abandoned his supporters and went over to the Deep State is breathtaking.
Once there was only a Trump fragrance called Empire... now he has gone full empire himself
Among the noise...
- Central Banks Have a $13 Trillion Problem
Paycheck to Paycheck
GUALFIN, ARGENTINA – The Dow was down 118 points on Wednesday. It should have been down a lot more. Of course, markets know more than we do. And maybe this market knows something that makes sense of these high prices. What we see are reasons to sell, not reasons to buy.
DJIA daily (incl. Thursday)... it was just taking a rest - click to enlarge.
Nearly half of all American families live “paycheck to paycheck,” say researchers. Without...
- Hell To Pay
Behind the Curve
Economic nonsense comes a dime a dozen. For example, Federal Reserve Chair Janet Yellen “think(s) we have a healthy economy now.” She even told the University of Michigan’s Ford School of Public Policy so earlier this week. Does she know what she’s talking about?
Somehow, this cartoon never gets old...
If you go by a partial subset of the ‘official’ government statistics, perhaps, it appears she does. The unemployment...
- French Selection Ritual, Round Two
Slightly Premature Victory Laps
The nightmare of nightmares of the globalist elites and France's political establishment has been avoided: as the polls had indicated, Emmanuel Macron and Marine Le Pen are moving on to the run-off election; Jean-Luc Mélenchon's late surge in popularity did not suffice to make him a contender – it did however push the established Socialist Party deeper into the dustbin of history. That was very Trotskyist of him (we can already picture a future Weekly...
- Trump Is An Insider Now
Conspiracy of the Few
GUALFIN, ARGENTINA – “U.S. stocks fall on Trump talk…” began a headline at Bloomberg. Or it may be Trump action. We had already counted six major campaign promises – including no O’care repeal and no “America First” foreign policy – already buried (some for the better).
A bunch of campaign promises get the MOAB treatment... A great many theories have been proposed to explain Trump's recent series of u-turns: 1. he is in thrall to...