Tuesday 31 October 2017
“ For theories and schools, like microbes and corpuscles, devour one another and by their strife ensure the continuity of life.. ”
__ Marcell Proust
Commentary & Analysis
Hawks unleashed could rock the markets
Run pug run; hawks are in the house!!
The chief hawk in this narrative is Stanford Economics Professor John Taylor ( JT ); aka the creator of the Taylor Rule for monetary policy. Should President Trump pull a surprise out of his hat this week ( Would it be a surprise if President Trump didn't surprise??), and appoints JT head of the US Federal Reserve Bank the market will most likely get rocked in a big way as the monetary hawks emerge from their well guarded cages..
According to the Taylor Rule, the current target for the fed funds rate should be about 2.94%% instead of the paltry 1.15%% it is now. Mr. Taylor's appointment wouldn't suggest an immediate 200 basis point rate hike from the Fed; but it would suggest future rate hikes will be faster and more furious than now anticipated.
Thus , here is how the market would likely react:
Why Is Bitcoin a Big Deal?Share on Facebook Tweet on Twitter
Posted by Of Two Minds - Charles Hugh Smith
on Wednesday, 01 November 2017 06:32
Centralized banking and all other forms of intermediary rentier skims are presented as solid. If history is any guide, these supposedly solid entities may well melt into air.
Monetary System Currency ResetShare on Facebook Tweet on Twitter
Posted by Martin Armstrong - Armstrong Economics
on Tuesday, 31 October 2017 06:58
QUESTION: G’day guys.
Thanks for a great seminar in Hong Kong!
I’m reading through your 1 world currency report and find it very interesting, going back to primary school teachings about barter systems and some funny monetary acceptances that have been in place many years ago. Like 14.5 kg copper plates as a currency only back in the 1600’s in Sweden. Or 1-ton barrels of tobacco. Very interesting and tough to carry in your wallet.The major teaching I received from the Hong Kong Seminar was to look at the currencies (something I’ve had plenty of lessons dealt over the years trying to trade) in regard to products and assets in the many different countries around the world.
My question now we are seeing bitcoins and possibly diamonds and other mediums we are not yet aware of yet replacing gold as a new vehicle to move cash or wealth into a better-performing countries assets.
With the collapse about to occur in Europe and Britain included monetary wise. Instead of buying gold in relation to USD one should buy gold against the Euro’s or Pounds when the time is right?
Or has a gold lost its lustre today and the contagion to gold may not occur to the extremes that have occurred in the past?
Will Europe money tell the story? The smart money is moving to the DOW. Will it return to gold when the people lose their confidence?
Thanks for the interesting and new way of looking at the markets Marty. I’m doing better with Socrates though still a novice.
Take care and wish I was coming to the next conference. Hope it’s a beauty.
ANSWER: Gold has lost its movability aspect as they hunt money for taxes. Twenty years ago you could hop on a plane with a briefcase of gold with no problem. From that perspective, gold has lost its international portability. This is obviously why people are turning to diamonds, rare ancient coins, and the like – movable assets. We are even witnessing real estate starting to decline now in New York City. The high-end real estate market (not the low-end) was making new highs as big money was trying to get off the grid. Realtors were reporting to us that the majority of such high-end deals were all for cash – no mortgages.
Gold would certainly be a better hedge against the Euro than the dollar in the short-term. It has outperformed the dollar because you always have to look at the currency. However, money will NEVER shift from the stock market all into gold. Everyone has their pet investment in what they feel comfortable. Gold is a retail product – not institutional. The Institutions can trade ETFs, gold stocks etc., but they will never take possession of gold.
What we are facing in truth is a currency reset. That means that ALL tangible assets rise against the currency in whatever country we are talking about. The goldbugs always hate the dollar and many of them have turned away from gold and into cryptocurrencies.
You will always have people who will prefer stocks, others gold, and others real estate. That is just the way it is. To each their own.
...also from Martin Armstrong:
Victor Adair: The Sept 8 Key Turn DateShare on Facebook Tweet on Twitter
Posted by Victor Adair - Live From The Trading Desk
on Monday, 30 October 2017 12:49
The US Dollar rally: accelerated this week. I’ve been short other currencies against the USD since early September and took partial profits this week even thought I think the USD rally has more to go. Double click chart for larger version
Diverging monetary policy: between the USA and other countries has been a key FX driver. On the September 8 Key Turn Date the 10 year treasury yield was at its lowest level since Trump’s election...but since then it has rallied to 5 month highs. Real yields have also been rising. The 2 year Treasury yield is at a 9 year high. Part of the reason for rising American interest rates (and a rising USD) is that traders are positioning for a more hawkish Fed. US Financial conditions are the easiest in 20 years...paving the way for the Fed to keep tightening.
Fed Chair: Fed Governor Powell is the front runner to replace Yellen but Trump might surprise markets and nominate both a Chair and Vice-Chair (Powell and Taylor?)
Fragmenting Countries, Part 1: Catalonia Is Just The BeginningShare on Facebook Tweet on Twitter
Posted by John Rubino - Dollarcollapse.cm
on Monday, 30 October 2017 06:46
Picture a life where you do most of your shopping through Amazon.com and the local farmers’ market, most of your communicating through Facebook and Instagram, much of your travel via Uber, and much of your saving and transacting with bitcoin, gold and silver.
Do you really need an immense, distant, and rapacious central government? Maybe not. Perhaps your region or ethnic group would be better off forming its own independent country.
This question is being asked — and answered — in a growing number of places where distinct cultures and ethnic groups within larger nations now see their government as more burden than benefit. The result: Secession movements are moving from the fringe to mainstream.
This is fascinating on a lot of levels, but why discuss it on a gloom-and-doom finance blog? Because secession is about the messiest event a country can experience short of civil war. And few things are more financially disruptive for an already over-leveraged society than potential dissolution.
Today’s fiat currencies depend for their value on the belief that the governments managing them are coherent and competent. Let a major region break away and plunge a debtor country into political/civil chaos and the markets will abandon its currency in a heartbeat. Note the sense of panic in the following article:
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