the strong usd

[Mega]

Re: the strong usd

Yet Oz is FULL of Coal & Atomic stocks..............its IS madness ...........a sort of Engery war?

[Mega]

Re: the strong usd

Hmmmmm, you might be right,

Rather than give REAL money to Russia/Iran etc.........go Green

[Chris Coles]

Re: the strong usd

I recall this to be consistent with EJ's thesis about why many (most?) Central Banks maintain gold reserves.

https://www.zerohedge.com/markets/ce...e-needed-start

It is blindingly obvious that the current economic model of the use of massive quantities of debt, to pay for everyday items, has reached an end game. What particularly interests me is the shadow in the background; shadow banking; which holds enormous quantities of debt instruments which were, and remain, the children of uncontrolled leverage in the run up to 2007/8. None of that has "gone away", instead it has grown relentlessly. Past history showed that all previous times the planet has reached this point, someone had the courage to simply get up one morning and state that all such debt; must vanish! Now the problem becomes the reset; at what value for assets?

Taking this back to a debate opened in the late 1980's in his book; The Downwave by Robert Beckman, his view was the price of all assets would return to pre 1939 levels. In turn, that would mean, say, a house priced at £1,000,000 today will be worth, say, £300. Now, if that is an correct assessment of the process we are about to live through, then what is the consequential level of the price of Gold, which then was £4.25?

https://www.thebalance.com/gold-price-history-3305646

Great Britain kept gold at 4.25 pounds per ounce until the 1944 Bretton-Woods Agreement. That's when most developed countries agreed to fix their currencies against the U.S. dollar since the United States owned 75 percent of the world's gold.

In which case, if the underlying debate is to take the entire World economy back to a Gold standard, while at one and the same time, resetting the economy back to, say, the late 1930's; then Gold will be an equivalent price, and, instead of Gold turning to say, $50,000 per ounce, it might be reduced to say $5.

Something to think about.

[jk]

Re: the strong usd

I recall this to be consistent with EJ's thesis about why many (most?) Central Banks maintain gold reserves.

https://www.zerohedge.com/markets/ce...e-needed-start

yes, he's been emphatic that there's a reason cb's hold gold.

[Mega]

Re: the strong usd

Just been reading it........5,000 years of history

[GRG55]

Re: the strong usd

I recall this to be consistent with EJ's thesis about why many (most?) Central Banks maintain gold reserves.

https://www.zerohedge.com/markets/ce...e-needed-start

[Mega]

Re: the strong usd

Being the unwashed scum they are you can be sure they looking for a "Quick fix".
Trouble is they run out of quick fixes, indeed you can see the look of a drug user, needing more & more.....

The CB's are tapped out, the West is drowning debt, China not looking that great either except they can always send the tanks in....

Only Russia seems on anything like a even keel ..............lots of Gold, very little debt.

Mike

[jk]

Re: the strong usd

There's look like a "ka" to me. Stock markets are still going up despite trade war and middle east and brexit.

Or maybe this will cause the "ka"? Just read it.

https://www.cnbc.com/2019/10/07/cram...aboolainternal

i think this is ka in slow motion. i also think the sudden stop that ej predicted will be neither sudden nor quite a stop.

everything will happen in slow motion. the global economy is slowing, rates are continuing down-albeit irregularly, stocks are going up in a flood of liquidity because the liquidity is confined to the financial markets.

the problem of the 1930's was unemployment. post war the promise was full employment, with dynamics which ultimately led to sig inflation- the problem which peaked in the 1970's.

so then the reagan era began with the promise of price stability, which is very irregularly distributed through the sectors of the economy. that era is coming to an end because the globalization which was part of the price control mechanism has caused today's central problem - underemployment.

unemployment is low but participation is low, and a lot of the jobs are crap jobs- part time, zero hour contract, gig-based, low pay. so the economy is slowing, and slowing, and slowing more.

there is asset inflation and inflation in non-tradeable goods and services, but the inflation indices are low.

the problem of under-employment will be solved with fiscal policy instead of monetary policy. whether it's infrastructure spending, "defense" spending and/or helicopter money- it will be financed by the fed and the money will rain on the economy, again producing inflation, but slowly, at least at first. that will be the slow-motion poom.

[Chris Coles]

Re: the strong usd

There's look like a "ka" to me. Stock markets are still going up despite trade war and middle east and brexit.

Or maybe this will cause the "ka"? Just read it.

https://www.cnbc.com/2019/10/07/cram...aboolainternal

We need to understand the purchasing environment; which is hedge funds with quants in the background providing milli-second trading on vast computer systems. These people have no fear of any change in direction of the markets simply because they can make a small profit with every turn of the screw; whatever direction the market moves. Thus they will continue to prod with every intention of being able to survive, regardless of the longer term outcome - they are certain to survive.

[touchring]

Re: the strong usd

There's look like a "ka" to me. Stock markets are still going up despite trade war and middle east and brexit.

Or maybe this will cause the "ka"? Just read it.

https://www.cnbc.com/2019/10/07/cram...aboolainternal

This is the "endless ka" I referred to earlier.
The inexorable, slow, steady deflationary influence on the rest of the world from a persistently strong US$.

I don't sense we have the same level of international cooperation as we did in the mid-80s to execute another Plaza Accord at this time.

The latest discussions to break this effect and try to create inflation revolve around MMT and fiscal stimulus policies. Even the Germans are now contemplating the latter, given "whatever it takes" hasn't been quite enough.

And the Democrats are making noises about taxing capital inflows to the USA.

[GRG55]

Re: the strong usd

https://www.reuters.com/article/us-i...-idUSKBN1WO2A8

BUSINESS NEWS
OCTOBER 9, 2019 / 11:22 AM / A DAY AGO
Italy raises $7 billion with first U.S. dollar bond since 2010

LONDON/ROME (Reuters) - Italy raised $7 billion on Wednesday with its first U.S. dollar bond in nearly a decade, a move that helps to diversify funding sources for the world’s third-biggest public debtor.

The issue, which has been more than a year in preparation, drew more than $18 billion in orders, according to one of the banks managing the deal - a sign of renewed investor confidence after turbulent months for Italian bonds under the previous, anti-European government.

With more than 200 billion euros in annual medium- and long-term refinancing needs, Rome is keen to find investors beyond the euro zone at a time when low rates discourage Italian savers and banks are under pressure to reduce domestic debt holdings.

Italy issued the bond in three tranches with maturities of five-, 10- and 30-years and worth, respectively, $2.5 billion, $2 billion and $2.5 billion...

[Chris Coles]

Re: the strong usd

Chris
You heard anything ref Brexit?
Its gone strangely quite @ the Home Office................No talk of any leave bans, no sudden meetings...
Mike

Mike, if you ask me they are talking, at last, and a deal will be soon coming. Chris.

[Mega]

Re: the strong usd

Chris
You heard anything ref Brexit?
Its gone strangely quite @ the Home Office................No talk of any leave bans, no sudden meetings...
Mike

[Chris Coles]

Re: the strong usd

Dollar going down in 2020? This is Luke Gromen's thesis.

The Most Crowded Trade

https://seekingalpha.com/article/4294621-crowded-trade

the most interesting part being this; which to my way of thinking points towards an unnatural period of employment statistics reporting; Simply unbelievable!

Deficit-Driven Liquidity Shortage

A significant chunk of U.S. economic outperformance over the past five years has been about fiscal stimulus.

In my opinion, this next chart is one of the most important visuals to be aware of over the next few years and I've included it in a few recent articles, because this isn't going away. The blue line is the U.S. federal budget deficit as a percentage of GDP. The red line is the unemployment rate. For the first time in modern history, the U.S. deficit is widening to a large deficit during a non-wartime non-recessionary period:

Chart Source: Goldman Sachs, Retrieved from CNBC

[Chomsky]

Re: the strong usd

i follow both gromen and brent johnson, the latter thinking that the dollar has a lot more upside ahead of it. i think the dollar goes up more first, then ultimately must come down, a lot. timing is beyond me.

also we have to distinguish the dollar's value vs other pieces of paper, vs its value vs stuff. we KNOW that it's got to lose a lot of buying power, hopefully slowly over an extended period of time.

New video with Brent Johnson:

https://www.realvision.com/tv/shows/..._hsmi=77871517