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WWW.AVIELFOREXLEARNINGEDGE.COM
I started trading currencies during 2003 with a demo account of $100,000 US with Saxo Bank.
After only demo trading until March 9, 2006 I made my first real forex trade at Trade Freedom in Montreal.
My first client under LPOA deposited $10,000 US and on May 4, 2006 deposited another $15,000 US. By June 9, I had increased the total funds to just over $50,000 US.
I traded for 6 associates at Trade Freedom and in the 3 months that I traded Forex there before taking my business over to MF Global I NEVER had one losing trade.
My first loss trading Forex came during June 2006 and it was for $200 US and it was the Most Important LOSS that I took in my Forex business.
The reason is that my Common Sense WON over my EGO.
I am a Fundamental Forex Trader and Teacher that uses MONEY FLOW as my EDGE.
Risk Management is the most important factor in being one of the few Traders whether Retail or Institutional that make it to the 5 percent group of winning Forex traders.
The control of your emotions is essential to being a successful trader whether Equities, Commodities or Forex. Fear, Greed and Ego must be dealt with in order to be a profitable currency trader.
You also need to understand that a good trade plan and knowledge of technical and fundamentals are all required to WIN in Forex.
My method achieves a Return of 50 percent ROI monthly. Results are available to people that are known to myself as I do not deal with the public.
REPEATED INTENTIONALLY TO EXPLAIN NEW ROI of 50%% VS 10% !!! Ask for NEW PROFORMA done by RR as of March 16, 2024.
I started trading currencies during 2003 with a demo account of $100,000 US with Saxo Bank. After only demo trading until March 9, 2006 I made my first real forex trade at Trade Freedom in Montreal. My first client under LPOA deposited $10,000 US and on May 4, 2006 deposited another $15,000 US. By June 9 I had increased the total funds to just over $50,000 US. I traded for 6 associates at Trade Freedom and in the 3 months that I traded Forex there before taking my business over to MF Global I NEVER had one losing trade.
My first loss trading Forex came during June 2006 and it was for $200 US and it was the Most Important LOSS that I took in my Forex business. The reason is that my Common Sense WON over my EGO. I am a Fundamental Forex Trader and Teacher that uses MONEY FLOW as my EDGE. Risk Management is the most important factor in being one of the few Traders whether Retail or Institutional that make it to the 5 percent group of winning Forex traders.
The control of your emotions is essential to being a successful trader whether Equities, Commodities or Forex. Fear, Greed and Ego must be dealt with in order to be a profitable currency trader. You also need to understand that a good trade plan and knowledge of technical indicators and fundamentals are all required to WIN in Forex. My method achieves a Return of 50 percent ROI monthly. Results are available to people that are known to myself as I do not deal with the public.
A contrarian Financial Advisor prepares clients for what others fail to see.
Great to see others realizing how cheap the producers of #gold and #silver are trading at, a historical low to the price of the commodity because 99.5% of Western investors have fully neglected the sector.
Fairly sure that will quickly change as the money flows change because the 70s and 80s show is replaying;
1. Rising bond yields due to rising inflation means that the bond market is no longer a safe haven.
2. Inverted yield curve means that Central Bank and the banking sector will continue loosing money putting cash in danger.
3. The stock market is at an overvalued valuations of dividend yield vs bond yields.
4. Global de-dollarization has taken flight putting further pressure on bond yields and replacing the #Petrodollar vs #gold in global trade settlement.
5. With cash, bonds, and the equity markets under pressure #gold and #silver are the last sector standing.
Seems #gold #silver and the precious metals sector's Golden Days are dead ahead because unlike the 70% debt to GDP of the 80s, today the FIAT based debt bubble just beginning to deflate was allowed to grow to 139% debt to GDP, and yet only 0.5% of Western money is currently positioned to swim with the current.
https://lnkd.in/gX9YwfvZ
GOLD: BUY & Forget About It | Bob Thompson
youtube.com
The Shanghai International Gold Exchange and Its Role in De-Dollarizationgainesvillecoins.com •
https://media.licdn.com/dms/image/D4...oQVo9ZCwdma22U
The Hierarchy of Money and the Case for $8,000 Gold
https://cdn-img.gainesvillecoins.com/blog/jan-icon.jpg
Jan Nieuwenhuijs
Published: March 21, 2023
In the hierarchy of money gold is superior to fiat money. From an historical perspective the past decades have been characterized by trust in fiat money, whereby fiat made up the lion share of global international reserves. The war between Russia and Ukraine (and by extension West and East), inflation, and systemic risks are reversing this trend. A long-term gold valuation model, which assumes gold will account for the majority of international reserves, suggests the gold price to exceed $8,000 in the coming decade.
https://cdn-img.gainesvillecoins.com...icture-(1).png
The trend of central banks increasing gold reserves is likely to continue.
The Hierarchy of Money
Reading Zoltan Pozsar’s analyses for a few years led me to read books and follow lectures by his intellectual mentor Perry Mehrling, Professor of International Political Economy. According to Mehrling there is a natural hierarchy of money, to be visualized as a pyramid.
https://cdn-img.gainesvillecoins.com...-money-(1).png
Pyramid of the hierarchy of money.
At the top of the pyramid sits the ultimate money, which is scarce, universally accepted, and has no counterparty risk because it’s no one’s liability: gold. Below gold are national currencies issued by central banks. Then come deposits that are created by commercial banks. Securities, such as bonds and equity, are at the bottom.
Because everything underneath gold can be created out of thin air, the base of the pyramid can be easily widened. Throughout the business cycle balance sheets (assets and liabilities) are extended—credit is created—causing an economic boom. During a recession, balance sheets contract and the shape of the pyramid is remodeled.
Horizontally, the pyramid is all about quantity and leverage. Vertically, the pyramid is about quality: the higher up the better the quality of money. From Mehrling:
In a boom, credit begins to look like money. Forms of credit become much more liquid, they become much more usable to make payments with. And in contraction, you find out that what you have is not money, it's credit actually. In a contraction, you find out that gold and currency are not the same thing. That gold is better. You find out that deposits and currency are not the same thing. That currency is better.
Now my interpretation…
A Long-term Gold Valuation Model
What has happened in the past decades, after severing the gold standard in 1971, is a massive increase in supply of fiat money, credit, and securities. The pyramid is out of shape with a tiny tip and a fat debt belly. Global debt to GDP is near its all-time high established in 2020.
Policy makers won’t allow the debt to default—a contraction of credit—because the global financial system has grown too big and intertwined. One default too much could risk the stability of the entire arrangement. The only way to restore the shape of the pyramid is by an increase in the price of gold.
In a previous article we discussed the relationship between the price of gold and equities over the past one hundred years. These are dynamics between the top of the pyramid and the bottom. We concluded that the current decline of the equity market capitalization, relative to GDP, is signaling a new gold bull market.
https://cdn-img.gainesvillecoins.com...d-gold-(1).png
In an economic downturn the US equity market cap to GDP ratio falls, and the dollar is debased through one of the four prices of money (par, interest rates, foreign exchange rates, price level) to boost the economy. As a result, the price of gold denominated in dollars increases.
In today’s article, we will use Mehrling’s hierarchy of money framework, and examine the relationship between national currencies and gold to get a sense of where the price of gold is headed.
Central banks have created so much “money” since 2008 that from an economic perspective the relation with bank deposits has weakened. Measuring the value of official gold reserves versus the monetary base (central bank money) may not satisfy to predict the future price of gold.
Instead, we will evaluate how much gold central banks are willing to hold relative to foreign national currencies. In other words, the composition of international reserves (foreign exchange and gold), which underpin their balance sheets. By going through the archives, I have been able to conceive a long run data series of gold as a percentage of international reserves from 1880 until present*.
https://cdn-img.gainesvillecoins.com...serves-(1).png
The chart shows world official gold reserves as a percentage of official international reserves.
Central banks in aggregate have an unusual faith in foreign exchange, as gold’s percentage of total reserves accounted for 16% in 2022, against a historical average of 59%. These central banks, however, are starting to lose confidence in the currencies issued by their peers. In 2022 official gold reserves went up by a record 1,136 tons, while foreign exchange reserves went down by a record $950 billion. Large purchases by central banks on all continents in recent years indicate how central banks think the system will stabilize, by a rising gold price, confirming they have no intention in designing a new pyramid.
https://cdn-img.gainesvillecoins.com...d-reserves.png
Global gold reserves.
In light of the war, which caused the US to freeze the Russian central bank’s dollar holdings, inflation, and systemic risks, the trend of gold increasing its share of total reserves is logical.
Should we extend this trend and assume gold to make up a conservative 51% of global international reserves, the price of gold would need to be $10,000 per troy ounce. Naturally, in the process of raising the gold price central banks increase the weight of their gold and sell foreign exchange, resulting in a lower price of gold required to make up the majority of total reserves. On the other hand, over time central bank balance sheets grow and so does their demand for international reserves, possibly revaluing gold in urgency.
I use central banks as a proxy for the entire economy. The private sector is in a similar boat as central banks: they have little exposure to gold versus credit assets as well. It’s definitely not just central banks that will drive up the price. Let’s say $8,000 per ounce, a ballpark figure, would make gold’s share of total reserves exceed 50%.
https://cdn-img.gainesvillecoins.com.../tweet-jan.png
Click the image to view the animated chart!
Conclusion
Throughout the ages the price of gold always rises as the amount of physical metal available is insufficient to meet mankind’s liquidity needs. National currencies devaluing against gold to increase liquidity is a fact of life.
In the old days, coins were debased by lowering their bullion content, resulting in more units of national currency. Since the gold standard was abandoned in 1971, fiat money can be created by the stroke of a key, aimed at boosting growth, or revitalizing the base of the pyramid. But the top inevitably follows. The price of gold has to go up to reset the shape of the pyramid. Now—given war, inflation, and systemic risk—will be one of those moments for the gold price to adjust.
*For this article I have excluded Special Drawing Rights, IMF Tranche Positions, and silver from international reserves, for the consistency of the data series and because they make up only a small part of total international reserves. Data from 1880 until 1913 is mainly sourced from Peter Lindert and Timothy Green. The numbers include official gold and foreign exchange reserves, not foreign exchange held by private banks or gold coins in circulation. Data from the interwar period is sourced from multiple publications by the League of Nations, Central Bank Annual Reports, the World Gold Council, and the Federal Reserve. Data since 1950 is sourced from the IMF, the World Gold Council, Metals Focus, and the BIS. Data from Robert Triffin is used as a check on my calculations. The numbers from 1880 until 1935 must be viewed as estimates.
Sources
I started trading currencies during 2003 with a demo account of $100,000 US with Saxo Bank.
After only demo trading until March 9, 2006 I made my first real forex trade at Trade Freedom in Montreal.
My first client under LPOA deposited $10,000 US and on May 4, 2006 deposited another $15,000 US. By June 9, I had increased the total funds to just over $50,000 US.
I traded for 6 associates at Trade Freedom and in the 3 months that I traded Forex there before taking my business over to MF Global I NEVER had one losing trade.
My first loss trading Forex came during June 2006 and it was for $200 US and it was the Most Important LOSS that I took in my Forex business.
The reason is that my Common Sense WON over my EGO.
I am a Fundamental Forex Trader and Teacher that uses MONEY FLOW as my EDGE.
Risk Management is the most important factor in being one of the few Traders whether Retail or Institutional that make it to the 5 percent group of winning Forex traders.
The control of your emotions is essential to being a successful trader whether Equities, Commodities or Forex. Fear, Greed and Ego must be dealt with in order to be a profitable currency trader.
You also need to understand that a good trade plan and knowledge of technical and fundamentals are all required to WIN in Forex.
My method achieves a Return of 50 percent ROI monthly. Results are available to people that are known to myself as I do not deal with the public.
REPEATED INTENTIONALLY TO EXPLAIN NEW ROI of 50%% VS 10% !!! Ask for NEW PROFORMA done by RR as of March 16, 2024.
I started trading currencies during 2003 with a demo account of $100,000 US with Saxo Bank. After only demo trading until March 9, 2006 I made my first real forex trade at Trade Freedom in Montreal. My first client under LPOA deposited $10,000 US and on May 4, 2006 deposited another $15,000 US. By June 9 I had increased the total funds to just over $50,000 US. I traded for 6 associates at Trade Freedom and in the 3 months that I traded Forex there before taking my business over to MF Global I NEVER had one losing trade.
My first loss trading Forex came during June 2006 and it was for $200 US and it was the Most Important LOSS that I took in my Forex business. The reason is that my Common Sense WON over my EGO. I am a Fundamental Forex Trader and Teacher that uses MONEY FLOW as my EDGE. Risk Management is the most important factor in being one of the few Traders whether Retail or Institutional that make it to the 5 percent group of winning Forex traders.
The control of your emotions is essential to being a successful trader whether Equities, Commodities or Forex. Fear, Greed and Ego must be dealt with in order to be a profitable currency trader. You also need to understand that a good trade plan and knowledge of technical indicators and fundamentals are all required to WIN in Forex. My method achieves a Return of 50 percent ROI monthly. Results are available to people that are known to myself as I do not deal with the public.
A contrarian Financial Advisor prepares clients for what others fail to see.
Great to see others realizing how cheap the producers of #gold and #silver are trading at, a historical low to the price of the commodity because 99.5% of Western investors have fully neglected the sector.
Fairly sure that will quickly change as the money flows change because the 70s and 80s show is replaying;
1. Rising bond yields due to rising inflation means that the bond market is no longer a safe haven.
2. Inverted yield curve means that Central Bank and the banking sector will continue loosing money putting cash in danger.
3. The stock market is at an overvalued valuations of dividend yield vs bond yields.
4. Global de-dollarization has taken flight putting further pressure on bond yields and replacing the #Petrodollar vs #gold in global trade settlement.
5. With cash, bonds, and the equity markets under pressure #gold and #silver are the last sector standing.
Seems #gold #silver and the precious metals sector's Golden Days are dead ahead because unlike the 70% debt to GDP of the 80s, today the FIAT based debt bubble just beginning to deflate was allowed to grow to 139% debt to GDP, and yet only 0.5% of Western money is currently positioned to swim with the current.
https://lnkd.in/gX9YwfvZ
GOLD: BUY & Forget About It | Bob Thompson
youtube.com
The Shanghai International Gold Exchange and Its Role in De-Dollarizationgainesvillecoins.com •
https://media.licdn.com/dms/image/D4...oQVo9ZCwdma22U
The Hierarchy of Money and the Case for $8,000 Gold
https://cdn-img.gainesvillecoins.com/blog/jan-icon.jpg
Jan Nieuwenhuijs
Published: March 21, 2023
In the hierarchy of money gold is superior to fiat money. From an historical perspective the past decades have been characterized by trust in fiat money, whereby fiat made up the lion share of global international reserves. The war between Russia and Ukraine (and by extension West and East), inflation, and systemic risks are reversing this trend. A long-term gold valuation model, which assumes gold will account for the majority of international reserves, suggests the gold price to exceed $8,000 in the coming decade.
https://cdn-img.gainesvillecoins.com...icture-(1).png
The trend of central banks increasing gold reserves is likely to continue.
The Hierarchy of Money
Reading Zoltan Pozsar’s analyses for a few years led me to read books and follow lectures by his intellectual mentor Perry Mehrling, Professor of International Political Economy. According to Mehrling there is a natural hierarchy of money, to be visualized as a pyramid.
https://cdn-img.gainesvillecoins.com...-money-(1).png
Pyramid of the hierarchy of money.
At the top of the pyramid sits the ultimate money, which is scarce, universally accepted, and has no counterparty risk because it’s no one’s liability: gold. Below gold are national currencies issued by central banks. Then come deposits that are created by commercial banks. Securities, such as bonds and equity, are at the bottom.
Because everything underneath gold can be created out of thin air, the base of the pyramid can be easily widened. Throughout the business cycle balance sheets (assets and liabilities) are extended—credit is created—causing an economic boom. During a recession, balance sheets contract and the shape of the pyramid is remodeled.
Horizontally, the pyramid is all about quantity and leverage. Vertically, the pyramid is about quality: the higher up the better the quality of money. From Mehrling:
In a boom, credit begins to look like money. Forms of credit become much more liquid, they become much more usable to make payments with. And in contraction, you find out that what you have is not money, it's credit actually. In a contraction, you find out that gold and currency are not the same thing. That gold is better. You find out that deposits and currency are not the same thing. That currency is better.
Now my interpretation…
A Long-term Gold Valuation Model
What has happened in the past decades, after severing the gold standard in 1971, is a massive increase in supply of fiat money, credit, and securities. The pyramid is out of shape with a tiny tip and a fat debt belly. Global debt to GDP is near its all-time high established in 2020.
Policy makers won’t allow the debt to default—a contraction of credit—because the global financial system has grown too big and intertwined. One default too much could risk the stability of the entire arrangement. The only way to restore the shape of the pyramid is by an increase in the price of gold.
In a previous article we discussed the relationship between the price of gold and equities over the past one hundred years. These are dynamics between the top of the pyramid and the bottom. We concluded that the current decline of the equity market capitalization, relative to GDP, is signaling a new gold bull market.
https://cdn-img.gainesvillecoins.com...d-gold-(1).png
In an economic downturn the US equity market cap to GDP ratio falls, and the dollar is debased through one of the four prices of money (par, interest rates, foreign exchange rates, price level) to boost the economy. As a result, the price of gold denominated in dollars increases.
In today’s article, we will use Mehrling’s hierarchy of money framework, and examine the relationship between national currencies and gold to get a sense of where the price of gold is headed.
Central banks have created so much “money” since 2008 that from an economic perspective the relation with bank deposits has weakened. Measuring the value of official gold reserves versus the monetary base (central bank money) may not satisfy to predict the future price of gold.
Instead, we will evaluate how much gold central banks are willing to hold relative to foreign national currencies. In other words, the composition of international reserves (foreign exchange and gold), which underpin their balance sheets. By going through the archives, I have been able to conceive a long run data series of gold as a percentage of international reserves from 1880 until present*.
https://cdn-img.gainesvillecoins.com...serves-(1).png
The chart shows world official gold reserves as a percentage of official international reserves.
Central banks in aggregate have an unusual faith in foreign exchange, as gold’s percentage of total reserves accounted for 16% in 2022, against a historical average of 59%. These central banks, however, are starting to lose confidence in the currencies issued by their peers. In 2022 official gold reserves went up by a record 1,136 tons, while foreign exchange reserves went down by a record $950 billion. Large purchases by central banks on all continents in recent years indicate how central banks think the system will stabilize, by a rising gold price, confirming they have no intention in designing a new pyramid.
https://cdn-img.gainesvillecoins.com...d-reserves.png
Global gold reserves.
In light of the war, which caused the US to freeze the Russian central bank’s dollar holdings, inflation, and systemic risks, the trend of gold increasing its share of total reserves is logical.
Should we extend this trend and assume gold to make up a conservative 51% of global international reserves, the price of gold would need to be $10,000 per troy ounce. Naturally, in the process of raising the gold price central banks increase the weight of their gold and sell foreign exchange, resulting in a lower price of gold required to make up the majority of total reserves. On the other hand, over time central bank balance sheets grow and so does their demand for international reserves, possibly revaluing gold in urgency.
I use central banks as a proxy for the entire economy. The private sector is in a similar boat as central banks: they have little exposure to gold versus credit assets as well. It’s definitely not just central banks that will drive up the price. Let’s say $8,000 per ounce, a ballpark figure, would make gold’s share of total reserves exceed 50%.
https://cdn-img.gainesvillecoins.com.../tweet-jan.png
Click the image to view the animated chart!
Conclusion
Throughout the ages the price of gold always rises as the amount of physical metal available is insufficient to meet mankind’s liquidity needs. National currencies devaluing against gold to increase liquidity is a fact of life.
In the old days, coins were debased by lowering their bullion content, resulting in more units of national currency. Since the gold standard was abandoned in 1971, fiat money can be created by the stroke of a key, aimed at boosting growth, or revitalizing the base of the pyramid. But the top inevitably follows. The price of gold has to go up to reset the shape of the pyramid. Now—given war, inflation, and systemic risk—will be one of those moments for the gold price to adjust.
*For this article I have excluded Special Drawing Rights, IMF Tranche Positions, and silver from international reserves, for the consistency of the data series and because they make up only a small part of total international reserves. Data from 1880 until 1913 is mainly sourced from Peter Lindert and Timothy Green. The numbers include official gold and foreign exchange reserves, not foreign exchange held by private banks or gold coins in circulation. Data from the interwar period is sourced from multiple publications by the League of Nations, Central Bank Annual Reports, the World Gold Council, and the Federal Reserve. Data since 1950 is sourced from the IMF, the World Gold Council, Metals Focus, and the BIS. Data from Robert Triffin is used as a check on my calculations. The numbers from 1880 until 1935 must be viewed as estimates.
Sources
- Bank for International Settlements (BIS), Annual and Monthly Reports.
- Banca D’Italia (1987). Gold In the International Financial System.
- Bloomfield, A. I. (1963). Short-Term Capital Movements Under the Pre-1914 Gold Standard.
- Board of Governors of the Federal Reserve System (1943). Banking and Monetary Statistics 1914-1941. Part 1.
- Eichengreen, B. & Flandreau, M. (2009). The rise and fall of the dollar (or when did the dollar replace sterling as the leading reserve currency?)
- Green, T. (1999, for the World Gold Council). Central Bank Gold Reserves. An historical perspective since 1845.
- International Monetary Fund. International Financial Statistics.
- League of Nations, multiple publications.
- Lindert, P. H. (1967). Key Currencies and The Gold Exchange Standard, 1900-1913.
- Lindert, P. H. (1969). Key Currencies and Gold 1900-1913.
- Mehrling, P. (2012). Economics in Money and Banking.
- Triffin, R. (1961) Gold and the Dollar Crisis, The Future of Convertibility.
- Triffin, R. (1964). The Evolution of the International Monetary System: Historical Reappraisal and Future Perspectives.
- World Gold Council, Gold Demand Trends reports and Datahub.
Read more about gold's role as international reserves from the author:
Zoltan Pozsar, the Four Prices of Money, and the Coming Gold Bull Market
Estimating the True Size of China’s Gold Reserves
Europe Has Been Preparing for a Global Gold Standard. Part 2
Turkish Central Bank Sends Gold To London. In Need for FX?
Governor of Dutch Central Bank States Gold Revaluation Account Is Solvency Backstop
What Happened to the $650 Billion in SDRs Issued in 2021?
Posted In: Blog
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- Post #12,546
- Quote
- Mar 20, 2024 9:27am Mar 20, 2024 9:27am
- | Commercial Member | Joined Dec 2014 | 11,787 Posts
David Simon ElkoubiDavid Simon Elkoubi• 1st• 1st+45K Followers ⎮ Founder at FINANCIAL NETWORKING GROUP ⎮Options & Futures Broker at Market Securities+45K Followers ⎮ Founder at FINANCIAL NETWORKING GROUP ⎮Options & Futures Broker at Market Securities
15h • 15h •
CRAZYYYY…Stock concentration is now at Great Depression levels:
According to Goldman Sachs, the market cap of the largest stock is now 750 TIMES the market cap of a 75th percentile stock.
To put this in perspective, even at the peak of the 2000 Dot-com bubble the metric only hit 550x.
We officially have a higher stock concentration than the peak of the Great Depression in 1932.
The top 10% of stocks in the US now reflect ~75% of the entire market.
Just 4 years ago, this metric showed the largest stock just ~400x bigger than the 75th percentile stock.
It's basically doubled then with all eyes on AI hype.
Big tech IS the stock market.
Activate to view larger image,
https://media.licdn.com/dms/image/D4...cviWqSHCKntE_E
15h • 15h •
CRAZYYYY…Stock concentration is now at Great Depression levels:
According to Goldman Sachs, the market cap of the largest stock is now 750 TIMES the market cap of a 75th percentile stock.
To put this in perspective, even at the peak of the 2000 Dot-com bubble the metric only hit 550x.
We officially have a higher stock concentration than the peak of the Great Depression in 1932.
The top 10% of stocks in the US now reflect ~75% of the entire market.
Just 4 years ago, this metric showed the largest stock just ~400x bigger than the 75th percentile stock.
It's basically doubled then with all eyes on AI hype.
Big tech IS the stock market.
Activate to view larger image,
https://media.licdn.com/dms/image/D4...cviWqSHCKntE_E
- Post #12,547
- Quote
- Mar 20, 2024 9:31am Mar 20, 2024 9:31am
- | Commercial Member | Joined Dec 2014 | 11,787 Posts
Demo Account of Michael - Opened March 15, 2024
User Number - U10D2462949
Email: [email protected] for your password.
Please look at the SCREEN SHOT - I started Michael's $50,000.00 US dollars account this morning. I did 7 winning Forex trades and reached my daily profit goal of $1000.00 US dollars so will STOP trading for today and resume on Sunday at 6:00 PM Eastern Standard Time.
For every $50,000 US dollars that I trade and manage each 30 days of trading my return on investment is a MINIMUM of 50%. Please contact me if you are interested to meet with me and receive my Pro Form Financial Statements from July 1, 2024 to December 31, 2024 produced by one of my professional team.
Aviel Forex Learning Edge Corporation
Futures DJIA Chart 5 Minutes (finviz.com)
PLEASE TAKE THE TIME TO READ AND UNDERSTAND !!!
Thank you. Bruce Warren Margolese - Riviere Rouge, Quebec !!!
5 Minute Chart Dow 30
https://finviz.com/futures_charts.ashx?t=YM&p=i5
You can reach me anytime 24/7 on my cellphone
438 995 2549
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Please Click On Each Link !!!
The link below is our Website
www.avielforexlearningedge.com
The next link is a great FREE resource - All the commodities and CFD's
that trade in the world. Have a look !!! In Living Color !!!
WWW.FINVIZ.COM
The next link is all the news in the world and all the blogs posting by the SECOND !!!
https://finviz.com/news.ashx?v=2
The next link is MOST IMPORTANT !!! A 5 Minute Chart Of Dow 30
https://finviz.com/futures_charts.ashx?p=i5&t=YM
Join our 90 day Forex trading course for $125.00 Canadian dollars. Send E Transfer to [email protected]
Thank You - AVIEL FOREX LEARNING EDGE CORPORATION
Each day around 8:30 AM to 9:30 AM Eastern Standard Time, I determine whether we have RISK ON or RISK OFF.
There is no indicator that can do this just as no technical indicator can effectively predict what will happen moment to moment as one MAJOR fundamental fact whether GEOPOLITICAL or FINANCIAL or now SUPPLY CHAIN or some New Covid 19 variant can cause the markets to go down 500 points as the Dow 30 has been doing recently and will continue to do.
That is why my Unique Method of Forex trading developed during 2003 when I started trading Forex and later on during 2012 when I added to my business model and started teaching my unique 100% proven method of Money Flow trading.
It is no longer possible to trade without a STOP LOSS !!!
Having a STOP LOSS of fewer than 100 PIPS is not a good strategy. That leads me to explain why 95% of all Retail Forex Traders lose. They trade with small amounts of money and SCALP which makes it almost impossible to make profits over a period of one year because of the VIOLENT NATURE of the swings in the Asset Classes caused by world changing events.
Each Forex Trade that you do should not risk more than 2% of your trading Capital and that is based on trading Capital of $50,000 US Dollars INITIALLY learning on a $50,000 US Funds Demo account just as I did for a period of three years before I made my first Real Funds Trade. That was during 2003 on the SAXO Platform and my first trade with money under management at Trade Freedom in Montreal with $100,000 US dollars being managed for 6 c'ients under a LPOA mandate.
PLEASE GO WITH THE MONEY FLOW
Let us review what we teach and why it works if YOU WORK.
Without your WORK then you are just wasting your time and probably your money.
There is no such thing as Political Correctness here because we are here to teach and share our knowledge.
SO.... going back to our winning FORMULA for FOREX SUCCESS.
20% of the SUCCESS is yourself the Forex Trader.
20% of the SUCCESS is your EDGE which we teach you and that is Money Flow Trading.
20% of the SUCCESS is control of your RISK (Your hard earned money) Our UNIQUE RISK MANAGEMENT allows you to trade without worry, fear and greed. Of course we want to make sure that you have the right qualities to be a winning Forex Trader so our course is for a period of three months, so we can teach you the right trading methods and we can see your results and make adjustments without your FEAR OF LOSS of Real Money.
20% of the SUCCESS is using and understanding the USE of Technical Indicators which include not only the common ones. It includes the understanding of Supply and Demand. Support and Resistance and the use of Pivot Points which you can see each day on our daily charts that cover ALL our Trade Plans which we also help you develop and explain WHY. These are our Winning Trade Plans that we review every three months or earlier if circumstances in the markets require that.
20% of the SUCCESS is the FUNDAMENTALS, which are much more than Data Releases each day around the world. It includes reports and articles extremely well researched as you can clearly see from this article that explains why the TREND in the Equity Markets especially in North America is DOWN. By understanding the difference between PERCEPTIONS (MARKETS) and REALITY, you then have a good handle on REALITY before the MASSES do and you are not surprised when events eventually unfold.
When successful traders aren't trading, they are researching, developing, and innovating. When unsuccessful traders aren't trading, they're staring at screens and forcing trades. There is nothing better for trading psychology than being at the cutting edge of a growing business.
What makes a trader successful is discipline: doing the right thing with fidelity. What keeps a trader successful is innovation: doing new things and turning them into disciplines.
Thursday, September 25, 2014
A Preview of Trading Psychology 2.0: From Best Practices to Best Processes
http://2.bp.blogspot.com/-4zHYD5MY44...teenbarger.jpg
One of the great disappointments I encounter when I read writings on the topic of trading psychology is that they invariably touch upon the same themes: discipline, controlling emotions, etc. Having worked with traders and portfolio managers for over a decade now, there is so much more to the psychology of trading than "sticking to your process" that I decided I had to write a book about what I was experiencing but wasn't reading. The title reflects that interest: Trading Psychology 2.0: From Best Practices to Best Processes.
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Please look at the SCREEN SHOT - I started Michael's $50,000.00 US dollars account this morning. I did 7 winning Forex trades and reached my daily profit goal of $1000.00 US dollars so will STOP trading for today and resume on Sunday at 6:00 PM Eastern Standard Time.
For every $50,000 US dollars that I trade and manage each 30 days of trading my return on investment is a MINIMUM of 50%. Please contact me if you are interested to meet with me and receive my Pro Form Financial Statements from July 1, 2024 to December 31, 2024 produced by one of my professional team.
Aviel Forex Learning Edge Corporation
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Each day around 8:30 AM to 9:30 AM Eastern Standard Time, I determine whether we have RISK ON or RISK OFF.
There is no indicator that can do this just as no technical indicator can effectively predict what will happen moment to moment as one MAJOR fundamental fact whether GEOPOLITICAL or FINANCIAL or now SUPPLY CHAIN or some New Covid 19 variant can cause the markets to go down 500 points as the Dow 30 has been doing recently and will continue to do.
That is why my Unique Method of Forex trading developed during 2003 when I started trading Forex and later on during 2012 when I added to my business model and started teaching my unique 100% proven method of Money Flow trading.
It is no longer possible to trade without a STOP LOSS !!!
Having a STOP LOSS of fewer than 100 PIPS is not a good strategy. That leads me to explain why 95% of all Retail Forex Traders lose. They trade with small amounts of money and SCALP which makes it almost impossible to make profits over a period of one year because of the VIOLENT NATURE of the swings in the Asset Classes caused by world changing events.
Each Forex Trade that you do should not risk more than 2% of your trading Capital and that is based on trading Capital of $50,000 US Dollars INITIALLY learning on a $50,000 US Funds Demo account just as I did for a period of three years before I made my first Real Funds Trade. That was during 2003 on the SAXO Platform and my first trade with money under management at Trade Freedom in Montreal with $100,000 US dollars being managed for 6 c'ients under a LPOA mandate.
PLEASE GO WITH THE MONEY FLOW
Let us review what we teach and why it works if YOU WORK.
Without your WORK then you are just wasting your time and probably your money.
There is no such thing as Political Correctness here because we are here to teach and share our knowledge.
SO.... going back to our winning FORMULA for FOREX SUCCESS.
20% of the SUCCESS is yourself the Forex Trader.
20% of the SUCCESS is your EDGE which we teach you and that is Money Flow Trading.
20% of the SUCCESS is control of your RISK (Your hard earned money) Our UNIQUE RISK MANAGEMENT allows you to trade without worry, fear and greed. Of course we want to make sure that you have the right qualities to be a winning Forex Trader so our course is for a period of three months, so we can teach you the right trading methods and we can see your results and make adjustments without your FEAR OF LOSS of Real Money.
20% of the SUCCESS is using and understanding the USE of Technical Indicators which include not only the common ones. It includes the understanding of Supply and Demand. Support and Resistance and the use of Pivot Points which you can see each day on our daily charts that cover ALL our Trade Plans which we also help you develop and explain WHY. These are our Winning Trade Plans that we review every three months or earlier if circumstances in the markets require that.
20% of the SUCCESS is the FUNDAMENTALS, which are much more than Data Releases each day around the world. It includes reports and articles extremely well researched as you can clearly see from this article that explains why the TREND in the Equity Markets especially in North America is DOWN. By understanding the difference between PERCEPTIONS (MARKETS) and REALITY, you then have a good handle on REALITY before the MASSES do and you are not surprised when events eventually unfold.
When successful traders aren't trading, they are researching, developing, and innovating. When unsuccessful traders aren't trading, they're staring at screens and forcing trades. There is nothing better for trading psychology than being at the cutting edge of a growing business.
What makes a trader successful is discipline: doing the right thing with fidelity. What keeps a trader successful is innovation: doing new things and turning them into disciplines.
Thursday, September 25, 2014
A Preview of Trading Psychology 2.0: From Best Practices to Best Processes
http://2.bp.blogspot.com/-4zHYD5MY44...teenbarger.jpg
One of the great disappointments I encounter when I read writings on the topic of trading psychology is that they invariably touch upon the same themes: discipline, controlling emotions, etc. Having worked with traders and portfolio managers for over a decade now, there is so much more to the psychology of trading than "sticking to your process" that I decided I had to write a book about what I was experiencing but wasn't reading. The title reflects that interest: Trading Psychology 2.0: From Best Practices to Best Processes.
WWW.AVIELFOREXLEARNINGEDGE.COM
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https://www.zerohedge.com/news/2019-...ops+to+zero%29
Submitted by Guy Haslemann, macro strategist and former head of rate strategy at Scotia Capital
Three decades of benefits from globalization and free trade have come to end.
I have absolutely no doubt that today’s monstrous attack on world order is a creation of the Fed’s own making. It was started by the Fed when the FOMC pushed rates to the ‘emergency’ level of 0% in 2008, but then failed to raise them when markets resumed functioning properly and were no longer considered to be in an ‘emergency’ state.
The Fed rightly gets the blame, simply because the US has the world’s reserve currency; therefore, all other central banks had to follow the Fed’s lead in cutting rates, or their country’s currency would have strengthened too much, leaving their exports competitive.
Japan may have been the first major developed economy to move rates to 0%, but this is the wrong comparison for three reasons: 1) the Yen is not the world’s reserve currency; 2) most of its debt is owned by its own people; and 3) Japan’s real problem is a rapidly shrinking population.
Today, currency wars are sprouting up everywhere and are an indication that countries have urgently decided to put themselves first. With global indebtedness at multiples of GDP and far above 2008 levels, alternatives have diminished. Certainly, healthy pockets of ‘creative destruction’ are a political landmine and viewed as something to be avoided at all costs.
Central banks, led by the Fed, are destroying the global financial world order. Today’s $15 trillion of negatively yielding debt is lunacy. An investor taking interest rate risk should be compensated for it with added compensation for credit risk.
Further dangers have developed from income seekers fleeing negative yielding bonds and replacing them with dividend paying stocks, i.e., the other end of the capital structure. Old school portfolio construction like 60/40 portfolios no longer serve their proper function - I will save that topic for my next note.
It is unsustainable and impossible for central banks to try to perpetually prop up markets and maintain negative real yields. Currency wars are a race to the bottom in rates because the goal is to weaken the currency. However, an exchange rate is relative – it’s a ratio. When both countries cut rates, the ratio for the most part remains stable.
Unfortunately, there are many aggregating negative consequence; including, financial repression, indebtedness, ‘everything bubbles’, and moral hazard. Much has already been written on these topics.
I'd like to focus on the Fed’s exit strategy. What is it? Do any central banks have one? If they don’t have an exit strategy, then I believe that they don’t have any strategy at all. Sports team don’t celebrate at half time. Providing the stimulus is always the easy part, but only half the game
I believe at this point, the only way for central banks to not lose total control of markets is for the Fed to refrain from cutting again any time soon. Let the other central banks cut if they must, but the Fed must lead the way out of financial repression and on a path toward rate normalization. Only the country with the world’s reserve currency can do this. And, after all, the Fed is the one who got us into this mess in the first place.
It will be a difficult road, but markets give the Fed too much credit anyway and it really doesn’t have the proper tools to properly fix much of anything (except maybe the level of total indebtedness via the price of money). And, don’t believe their hubris when FOMC members say, “we are the only game in town”. They’d like to believe they are, but they are not.
The Fed is a central bank not a Finance Ministry, so it should stop acting like the latter.
Refraining from cutting again will likely mean a period of hardship brought on by a stronger dollar and weaker equity market. FOMC members should talk less and stop offering the 'market put’ that market participants now readily expect at the first sign of any market or economic weakness.
In short, the FOMC has to stop trying to make everything better today, because imbalances and debt are aggregating and Fed actions are mortgaging the world of tomorrow and damaging the economic world order.
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Dislikedhttps://www.zerohedge.com/news/2019-...ops+to+zero%29 SNIPPET: Critically, as Jim Grant noted recently, the spread between the 10-year and three-month yields is an important indicator, James Bianco, president and eponym of Bianco Research LLC notes today. On six occasions over...Ignored
Good morning Forex traders. I have been trading in LIVE time since July 15, 2019. I have recently moved my business location and during this period of time I have been using my cellphone and tablet to trade. I have been set up since July 25, 2019 with my desktop and notebook computer.
As you can see from the SCREENSHOT , I have closed my last 8 trades for a net profit of $2622.10 US Dollars.
When I started trading on July 15, 2019 when I arrived at my new office / home the balance on this FXCM UK Demo account was just over $15,000 US Dollars.
As we can all see from the SCREENSHOT the balance all in cash is $48,026.30 US Dollars.
That is an increase in excess of $33,000 US Dollars in 30 days of Forex trading. As most of you know that come here to read my posts and watch my Forex trades using my unique and 100% proven method of Forex trading developed over the last 17 years of hands on trading tens of millions of US Dollars using REAL FUNDS the results speak for themselves.
I soon will be stopping my posting on this thread other than perhaps a weekly update for those that want to subscribe to my corporate website.
Comments and feedback is always welcome.
Benjamin
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Coming Down from Cloud Cuckoo Land | Economic Prism
Coming Down from Cloud Cuckoo Land
Posted on October 6, 2023 by MN Gordon
https://economicprism.com/wp-content...3/01/Crash.png
Schlitz beer was always revolting. But at the right price – and having the right effect – “the beer that made Milwaukee famous” had a nice run.
In between the birth and death of capital there’s a wide-ranging succession. The lifecycle of capital generally follows that it is imagined, produced, consumed, and destroyed. How exactly this all takes place involves varying and infinite undulations.
One generation may produce wealth. While the next generation burns through it. Many aspects of a person’s capabilities, understanding, industry, and character can determine if they’re producers or consumers. The most determinant facet, however, is how one approaches their unique circumstances.
The July 21, 2014, edition of Forbes Magazine documented the Stroh family’s methodical rise and swift disappearance from the beer brewing business. The print edition of the article titled, How to Blow $9 Billion, began with the following remark:
“It took the Stroh family over a century to build the largest private beer fortune in America. And it took just a few bad decisions to lose the entire thing.”
What worked for the Stroh family was taking a long-term time horizon. Wealth was built by incrementally acquiring and growing a loyal and devoted regional customer base.
What didn’t work for the Stroh family was ‘going big.’ The debt financed acquisitions of Schaefer and Schlitz in the early-1980s, and the costly bid to become a national brand, was its ultimate demise.
By the end of the century, after growing too big for its britches, the 150-year-old Stroh family beer business was sold off at fire sale prices.
We mention the capital lifecycle of Stroh, as an example. Our real interest here is wealth. Where does it come from? How is it accumulated? And why is it destroyed?
What follows, is an attempt to answer these questions…
Coffee Table Economics
As we understand it, when a depositor makes a deposit, he is, in essence, lending money to the bank. But what does the deposit represent?
If the deposit is earned money, it represents something of equal value to that produced by the depositor’s labors. The deposit also represents something the depositor would rather save for the future than consume today.
In a tangible sense, the deposit could represent anything. It could even represent a coffee table. In this example, there are only a few things to do with a surplus coffee table. You could store it for your own future use. You could trade it with a willing buyer for something of equal value.
In each of these instances, there’s no increase in capital. The coffee table remains a coffee table. Nothing more. Nothing less.
Alternatively, you could sell the coffee table for cash. If you then stuff the cash in your mattress, you have the equivalent of one coffee table. Again, there’s been no increase in capital.
But suppose you deposit the money at your bank and leave it there at interest. You would’ve loaned the bank your surplus labor, as represented by the value of a coffee table. And the interest paid represents the beginning of an increase in capital.
Now consider that after your deposit, an enterprising carpenter, who’s without tools and materials, borrows your deposits from the bank to buy a table saw, doweling jigs, and red oak lumber. These tools and materials represent your coffee table.
But with these tools and materials, the carpenter gets to work and makes three coffee tables. One he keeps for himself. The other two he sells.
Wealth Accumulation and Destruction
With the earnings from the second coffee table, he repays the bank the money he borrowed to buy the tools and materials. After that, he still has the proceeds of the third coffee table, which is profit. Then, instead of spending this profit, he saves it. He deposits it in the bank at interest.
The bank now has the capital of two coffee tables. In addition, the carpenter still owns the tools. All from one surplus coffee table to begin with.
If he desires, he can repeat this process again and again. He may even file articles with his state government and incorporate his coffee table business.
Through this activity wealth has been produced and accumulated. And more wealth can be produced and accumulated in this manner, provided the labor is not lost.
Yet just as wealth has been produced and accumulated, it can also be consumed and destroyed.
Suppose a third man comes to the bank and borrows the money that the carpenter deposited. But instead of investing it in his own labor and ingenuity, he uses it to make an ill-advised speculation on shares of WeWork Inc – just prior to its 95 percent share price swan dive.
The borrowed money, for both the lender and borrower, represents a loss. Specifically, in this instance, the loss is equivalent to the amount of labor necessary to produce two coffee tables.
Still, in this example, the loss is limited. The borrower learns a valuable lesson from the school of hard knocks. The lender can likely write it off without much effect.
Of course, if this were to happen en masse it would be an entirely different story.
Alas, the story of borrowing, speculating, and going broke en masse is the primary story of our time. In fact, we’re on the cusp of the sort of real wealth destruction that only occurs about once per century – or even once per millennium.
Inverted Debt Pyramids
Fractional reserve banking has always been a game of smoke and mirrors. Bankers pretend they hold deposits. Depositors pretend the banks have their cash stacked, and safely stored away in an interior vault where they can access it at any time.
Prudent bankers strive to lend credit to those who produce and accumulate wealth. So, too, they try to limit their business dealings with riverboat gamblers. Recognizing the difference in today’s hyper-modern economy takes real wisdom.
Modern banking, especially where Wall Street is involved, can misalign anticipated rewards with their underlying risks. We’ve all seen how the proliferation of financial products, and the supposed assets they represent, can obscure risks that are real and consequential.
Wall Street banks make a fine art of confounding assets and liabilities. Loans, for example, are securitized in the form of mortgage-backed securities and collateralized loan obligations and sold as investments.
All the paper shuffling works well, so long as the flow of credit remains one step ahead of debt servicing. In this manner, credit can be piled in an inverted debt pyramid to unfathomable heights.
Still, that doesn’t mean there are no limits at all.
Remember, the value in money is in what it represents. Every dollar of actual money should be derived from a dollar’s worth of wealth that has been produced. Every dollar of credit multiplied upon that money should imply a dollar’s worth of wealth that’s in the process of being created, plus interest to compensate the lender’s risk.
This is how wealth creation should work in a world where money is sound, budgets are balanced, and bankers stand behind their loans.
Coming Down from Cloud Cuckoo Land
The present world, however, rarely works as expected. Through policies of extreme credit market intervention by the Federal Reserve, an illusion of fake money wealth has been concentrated and pushed to the limit.
This is the current state, as we see it, which has manifested over the last 40 years. This period is coming to an abrupt end. The next part of the story is when the fake money wealth is set on fire with systematic efficiency.
Bill Bonner, of Bonner Private Research, recently elaborated where we’ve been and where we’re going:
“The basic building brick for the whole world’s financial edifice is the US 10-year T bond. Yesterday [Tuesday], the real yield (adjusted for inflation) on the 10-year rose to 2.27%. That was what it was in January 2009, just after Ben Bernanke began his disastrous ultra-low rate fantasy (as if you could actually make people better off by falsifying the cost of capital!)…the proximate cause of today’s financial distress.
“Until Bernanke went off the rails, the US financial system retained at least the appearance of sanity. It could walk and talk, more or less like a normal economy. People remembered where they lived; they could still get home.
“It cost money (positive interest rates) to borrow back then…which limited debt to what people could afford. But then, after the Fed dragged interest rates below zero, in real terms, the sky was the limit. That is what made the US financial world what it became – 2009-2020 – cloud cuckoo land, where fake capitalists borrowed fake money at fake interest rates in order to make fake profits.
“Those profits disappear when the whole fake hullabaloo comes to an end.”
The best way to come down from cloud cuckoo land is to never travel there to begin with. Of course, this is no longer an option. Thanks to Fed policies of extreme credit market intervention the entire economy has been taken for a wild ride.
And the return flight – where consumers, businesses, and governments go broke en masse – is headed for a crash and burn landing.
[Editor’s note: Today, more than ever, unconventional investing ideas are needed. Discover how to protect your wealth and financial privacy, using the Financial First Aid Kit.]
Sincerely,
MN Gordon
for Economic Prism
Return from Coming Down from Cloud Cuckoo Land to Economic Prism
This entry was posted in Economy, MN Gordon and tagged bill bonner, schlitz beer, stroh brewery company, treasuries, wealth destruction. Bookmark the permalink.
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4 Responses to Coming Down from Cloud Cuckoo Land
Coming Down from Cloud Cuckoo Land
Posted on October 6, 2023 by MN Gordon
https://economicprism.com/wp-content...3/01/Crash.png
Schlitz beer was always revolting. But at the right price – and having the right effect – “the beer that made Milwaukee famous” had a nice run.
In between the birth and death of capital there’s a wide-ranging succession. The lifecycle of capital generally follows that it is imagined, produced, consumed, and destroyed. How exactly this all takes place involves varying and infinite undulations.
One generation may produce wealth. While the next generation burns through it. Many aspects of a person’s capabilities, understanding, industry, and character can determine if they’re producers or consumers. The most determinant facet, however, is how one approaches their unique circumstances.
The July 21, 2014, edition of Forbes Magazine documented the Stroh family’s methodical rise and swift disappearance from the beer brewing business. The print edition of the article titled, How to Blow $9 Billion, began with the following remark:
“It took the Stroh family over a century to build the largest private beer fortune in America. And it took just a few bad decisions to lose the entire thing.”
What worked for the Stroh family was taking a long-term time horizon. Wealth was built by incrementally acquiring and growing a loyal and devoted regional customer base.
What didn’t work for the Stroh family was ‘going big.’ The debt financed acquisitions of Schaefer and Schlitz in the early-1980s, and the costly bid to become a national brand, was its ultimate demise.
By the end of the century, after growing too big for its britches, the 150-year-old Stroh family beer business was sold off at fire sale prices.
We mention the capital lifecycle of Stroh, as an example. Our real interest here is wealth. Where does it come from? How is it accumulated? And why is it destroyed?
What follows, is an attempt to answer these questions…
Coffee Table Economics
As we understand it, when a depositor makes a deposit, he is, in essence, lending money to the bank. But what does the deposit represent?
If the deposit is earned money, it represents something of equal value to that produced by the depositor’s labors. The deposit also represents something the depositor would rather save for the future than consume today.
In a tangible sense, the deposit could represent anything. It could even represent a coffee table. In this example, there are only a few things to do with a surplus coffee table. You could store it for your own future use. You could trade it with a willing buyer for something of equal value.
In each of these instances, there’s no increase in capital. The coffee table remains a coffee table. Nothing more. Nothing less.
Alternatively, you could sell the coffee table for cash. If you then stuff the cash in your mattress, you have the equivalent of one coffee table. Again, there’s been no increase in capital.
But suppose you deposit the money at your bank and leave it there at interest. You would’ve loaned the bank your surplus labor, as represented by the value of a coffee table. And the interest paid represents the beginning of an increase in capital.
Now consider that after your deposit, an enterprising carpenter, who’s without tools and materials, borrows your deposits from the bank to buy a table saw, doweling jigs, and red oak lumber. These tools and materials represent your coffee table.
But with these tools and materials, the carpenter gets to work and makes three coffee tables. One he keeps for himself. The other two he sells.
Wealth Accumulation and Destruction
With the earnings from the second coffee table, he repays the bank the money he borrowed to buy the tools and materials. After that, he still has the proceeds of the third coffee table, which is profit. Then, instead of spending this profit, he saves it. He deposits it in the bank at interest.
The bank now has the capital of two coffee tables. In addition, the carpenter still owns the tools. All from one surplus coffee table to begin with.
If he desires, he can repeat this process again and again. He may even file articles with his state government and incorporate his coffee table business.
Through this activity wealth has been produced and accumulated. And more wealth can be produced and accumulated in this manner, provided the labor is not lost.
Yet just as wealth has been produced and accumulated, it can also be consumed and destroyed.
Suppose a third man comes to the bank and borrows the money that the carpenter deposited. But instead of investing it in his own labor and ingenuity, he uses it to make an ill-advised speculation on shares of WeWork Inc – just prior to its 95 percent share price swan dive.
The borrowed money, for both the lender and borrower, represents a loss. Specifically, in this instance, the loss is equivalent to the amount of labor necessary to produce two coffee tables.
Still, in this example, the loss is limited. The borrower learns a valuable lesson from the school of hard knocks. The lender can likely write it off without much effect.
Of course, if this were to happen en masse it would be an entirely different story.
Alas, the story of borrowing, speculating, and going broke en masse is the primary story of our time. In fact, we’re on the cusp of the sort of real wealth destruction that only occurs about once per century – or even once per millennium.
Inverted Debt Pyramids
Fractional reserve banking has always been a game of smoke and mirrors. Bankers pretend they hold deposits. Depositors pretend the banks have their cash stacked, and safely stored away in an interior vault where they can access it at any time.
Prudent bankers strive to lend credit to those who produce and accumulate wealth. So, too, they try to limit their business dealings with riverboat gamblers. Recognizing the difference in today’s hyper-modern economy takes real wisdom.
Modern banking, especially where Wall Street is involved, can misalign anticipated rewards with their underlying risks. We’ve all seen how the proliferation of financial products, and the supposed assets they represent, can obscure risks that are real and consequential.
Wall Street banks make a fine art of confounding assets and liabilities. Loans, for example, are securitized in the form of mortgage-backed securities and collateralized loan obligations and sold as investments.
All the paper shuffling works well, so long as the flow of credit remains one step ahead of debt servicing. In this manner, credit can be piled in an inverted debt pyramid to unfathomable heights.
Still, that doesn’t mean there are no limits at all.
Remember, the value in money is in what it represents. Every dollar of actual money should be derived from a dollar’s worth of wealth that has been produced. Every dollar of credit multiplied upon that money should imply a dollar’s worth of wealth that’s in the process of being created, plus interest to compensate the lender’s risk.
This is how wealth creation should work in a world where money is sound, budgets are balanced, and bankers stand behind their loans.
Coming Down from Cloud Cuckoo Land
The present world, however, rarely works as expected. Through policies of extreme credit market intervention by the Federal Reserve, an illusion of fake money wealth has been concentrated and pushed to the limit.
This is the current state, as we see it, which has manifested over the last 40 years. This period is coming to an abrupt end. The next part of the story is when the fake money wealth is set on fire with systematic efficiency.
Bill Bonner, of Bonner Private Research, recently elaborated where we’ve been and where we’re going:
“The basic building brick for the whole world’s financial edifice is the US 10-year T bond. Yesterday [Tuesday], the real yield (adjusted for inflation) on the 10-year rose to 2.27%. That was what it was in January 2009, just after Ben Bernanke began his disastrous ultra-low rate fantasy (as if you could actually make people better off by falsifying the cost of capital!)…the proximate cause of today’s financial distress.
“Until Bernanke went off the rails, the US financial system retained at least the appearance of sanity. It could walk and talk, more or less like a normal economy. People remembered where they lived; they could still get home.
“It cost money (positive interest rates) to borrow back then…which limited debt to what people could afford. But then, after the Fed dragged interest rates below zero, in real terms, the sky was the limit. That is what made the US financial world what it became – 2009-2020 – cloud cuckoo land, where fake capitalists borrowed fake money at fake interest rates in order to make fake profits.
“Those profits disappear when the whole fake hullabaloo comes to an end.”
The best way to come down from cloud cuckoo land is to never travel there to begin with. Of course, this is no longer an option. Thanks to Fed policies of extreme credit market intervention the entire economy has been taken for a wild ride.
And the return flight – where consumers, businesses, and governments go broke en masse – is headed for a crash and burn landing.
[Editor’s note: Today, more than ever, unconventional investing ideas are needed. Discover how to protect your wealth and financial privacy, using the Financial First Aid Kit.]
Sincerely,
MN Gordon
for Economic Prism
Return from Coming Down from Cloud Cuckoo Land to Economic Prism
This entry was posted in Economy, MN Gordon and tagged bill bonner, schlitz beer, stroh brewery company, treasuries, wealth destruction. Bookmark the permalink.
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4 Responses to Coming Down from Cloud Cuckoo Land
- https://secure.gravatar.com/avatar/e...40&d=blank&r=gSteven Rowlandson says:
October 8, 2023 at 4:36 am
What if people, banks and governments refuse to face reality and come down from cloud cuckoo land? If they have a vicious disregard for truth they will feel the same about reality. - Reply
- https://secure.gravatar.com/avatar/0...40&d=blank&r=gJunior says:
October 8, 2023 at 9:14 am
It was NOT a few bad decisions otherwise governments around the world should fail according to your logic. After all, the government is a corporation see: 28 USC section 3002 (15)(A), the government is a federal civil corporation! - Think of what you said: it took the family a century to build a 9B private beer corporation. That means a century of good decision making. No-one who can build like that will squander in a few bad decisions unless they intend to, or the government over-regulates, or they succumb to destructive forces beyond their control.
From Bruce Warren Margolese - IMPORTANT NOTE - March 21, 2024 at 6:02 AM - Before you listen to Bloomberg or CNBC today have a listen to 16 minutes and 18 seconds of REALITY !!!
Now you know how we arrived into CUCKOO WORLD !!!
The National Debt Scam - YouTube
- Post #12,555
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- Edited 6:15am Mar 21, 2024 5:50am | Edited 6:15am
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← Flying on a Wing and a Prayer
Coming Down from Cloud Cuckoo Land →
Where Did Neel Kashkari’s Infinite Cash Go?
Posted on September 29, 2023 by MN Gordon
https://economicprism.com/wp-content...elKashkari.png
On April 10, 2020, at the apex of mass coronavirus hysteria, Minneapolis Fed President Neel Kashkari appeared on 60 Minutes. With eyes bugging out of his head, he offered a critical insight.
That the Federal Reserve has “infinite cash” and will do whatever it needs to make sure there is enough cash in the banking system.
What Kashkari didn’t mention is that when infinite cash is supplied to the banking system the quality of that cash ultimately reverts to its intrinsic value – zero. By 2022, the applications of infinite cash had pushed consumer prices to a 40 year high.
While cash is still worth more than zero, it’s worth far less than it was just three years ago. According to the Bureau of Labor Statistics own inflation calculator, the dollar has lost about 20 percent of its purchasing power over this time. In reality, and as American consumers have experienced, the dollar’s loss of purchasing power is far greater.
By the BLS calculator, workers who haven’t gotten a 20 percent raise since 2020, are worse off than they were just three years ago. Certainly, a lot has happened over this time. But we presume most workers are not making 20 percent more than they were in 2020.
This is how the inflation tax works. The federal government prints money and spends it. Consumers pay for it via currency devaluation.
Yet, at the same time, to contain the inflation of the Fed’s own making, consumers are also dealing with higher interest rates. It is a brutal situation, where consumers are using credit cards to make ends meet, while also having to pay higher debt servicing charges.
The $700 Billion Man
Last week, Kashkari, while speaking at the Economic Club of Minnesota, marveled at how consumer spending has continued in the face of the Fed’s interest rate hikes.
“I would have thought with 500 basis points or 525 basis points of interest rate increases, we would have slammed the brakes on consumer spending and it has not slammed the brakes on consumer spending. It continues to exceed expectations.”
Then, this week, in an essay posted to the Minneapolis Fed’s website, Kashkari put the odds of further Fed rate hikes, above and beyond an additional 25 basis point increase, at 40 percent. This, according to Kashkari, would be needed to get consumer price inflation back down to the Fed’s 2 percent target.
We’ll have more on the plight of the lowly consumer in just a moment. But first, let’s remember who Kashkari is, so as to better understand the words he speaks.
If you recall, about 15 years ago, as federal bailout chief, Kashkari functioned as the highly visible hand of the market. When the sky was falling in early-2009, he awoke each morning, put on his pants one leg at a time, drank his coffee, and rapidly funneled Treasury Secretary Hank Paulson’s $700 billion of TARP funds to the government’s preferred financial institutions.
Incidentally, the experience had a severe effect on Kashkari’s mental health. He lost his mind.
Shortly after blowing through the $700 billion Kashkari became a hermit and took to a cabin in the Sierra Nevada Mountains – near Donner Pass. There he pursued his other life’s purpose of chopping wood and burning it. We thought we’d seen the last of him.
Boom and Bust
Sadly, true believers are incapable of amiably exiting the trappings of public life for good. After a failed California gubernatorial campaign in 2014, losing to retread Governor Jerry Moonbeam Brown, Kashkari resurfaced as Minneapolis Fed President in 2016.
We presume this appointed position was Kashkari’s reward for the abuse heaped upon him from grandstanding Representatives – table pounders like Barney Frank and Maxine Waters – while handing out $700 billion in taxpayer dollars to Wall Street banks.
We don’t know how these appointment decisions are made. Perhaps someone in the executive branch made a phone call. The point is Kashkari is positioned at a post where he can exact maximum destruction on American citizens, as he pursues scientific management of the economy for the benefit of the central bank.
For real central planners like Kashkari, appointed positions are the crème de la crème. For the rest of us lowly wage earners these appointed positions come at a cost.
Central bankers, through their extreme intervention in credit markets, perpetuate a boom-and-bust cycle that’s far beyond anything which could ever occur under a gold standard with market determined interest rates.
In 2020-21, the Fed artificially pressed interest rates to nearly zero and flooded the economy with $5 trillion of infinite cash; thus, inflating consumer prices to a 40 year high. Since then, the Fed has hiked interest rates 5.25 percent and removed $1 trillion of its infinite cash.
Remember, the effects of rising interest rates take time. The economy is dynamic, and the infinite relationships and exchanges that occur are nonlinear.
Where Did Neel Kashkari’s Infinite Cash Go?
By this, the economy is a social system not a mechanical system. It doesn’t work as a teetertotter, where if you push down on one side the other side goes up.
Movements are erratic, often appear irrational, and are the result of countless competing points of stimulus.
The new regime of higher interest rates is currently filtering its way through all areas of the economy and financial markets. The cause and effect can appear delayed, as the movements are far from mechanical.
Kashkari’s excitement that consumer spending “continues to exceed expectations” in the face of rapid interest rate hikes will soon fade. The Fed’s yo-yoing of credit markets has set consumers up for untimely disaster.
First consumers were enticed by low interest rates to take on massive debt. Then, as consumer prices rocketed to the moon, more and more debt became essential to make ends meet. All the while, interest rates, as benchmarked by the 10 Year Treasury yield, have increased to 15-year highs.
At this point, and regardless of what Kashkari says, consumers are all tapped out. Any excess savings they managed to accumulate during the government lockdown are now gone.
This was the conclusion reached by Kashkari’s cohorts at the Federal Reserve Bank of San Francisco. The grim details were reported by Bloomberg earlier this week:
“Americans outside the wealthiest 20 percent of the country have run out of extra savings and now have less cash on hand than they did when the pandemic began.
“For the bottom 80 percent of households by income, bank deposits and other liquid assets were lower in June this year than they were in March 2020, after adjustment for inflation.
On top of that, U.S. credit card debt recently eclipsed the $1 trillion mark for the first time ever.
So, where did Kashkari’s infinite cash go?
Naturally, it was a lie all along. And with the turn of the credit cycle, it turned to infinite misery for broke, overindebted consumers.
[Editor’s note: Is the Pentagon secretly provoking China to attack Taiwan? Are your finances prepared for such madness? Answers to these important questions can be found in a unique Special Report. You can access a copy here for less than a penny.]
Sincerely,
MN Gordon
for Economic Prism
Return from Where Did Neel Kashkari’s Infinite Cash Go? to Economic Prism
This entry was posted in MN Gordon, Politics and tagged $700 billion, boom and bust, infinite cash, neel kashkari, tarp. Bookmark the permalink.
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Coming Down from Cloud Cuckoo Land →
Where Did Neel Kashkari’s Infinite Cash Go?
Posted on September 29, 2023 by MN Gordon
https://economicprism.com/wp-content...elKashkari.png
On April 10, 2020, at the apex of mass coronavirus hysteria, Minneapolis Fed President Neel Kashkari appeared on 60 Minutes. With eyes bugging out of his head, he offered a critical insight.
That the Federal Reserve has “infinite cash” and will do whatever it needs to make sure there is enough cash in the banking system.
What Kashkari didn’t mention is that when infinite cash is supplied to the banking system the quality of that cash ultimately reverts to its intrinsic value – zero. By 2022, the applications of infinite cash had pushed consumer prices to a 40 year high.
While cash is still worth more than zero, it’s worth far less than it was just three years ago. According to the Bureau of Labor Statistics own inflation calculator, the dollar has lost about 20 percent of its purchasing power over this time. In reality, and as American consumers have experienced, the dollar’s loss of purchasing power is far greater.
By the BLS calculator, workers who haven’t gotten a 20 percent raise since 2020, are worse off than they were just three years ago. Certainly, a lot has happened over this time. But we presume most workers are not making 20 percent more than they were in 2020.
This is how the inflation tax works. The federal government prints money and spends it. Consumers pay for it via currency devaluation.
Yet, at the same time, to contain the inflation of the Fed’s own making, consumers are also dealing with higher interest rates. It is a brutal situation, where consumers are using credit cards to make ends meet, while also having to pay higher debt servicing charges.
The $700 Billion Man
Last week, Kashkari, while speaking at the Economic Club of Minnesota, marveled at how consumer spending has continued in the face of the Fed’s interest rate hikes.
“I would have thought with 500 basis points or 525 basis points of interest rate increases, we would have slammed the brakes on consumer spending and it has not slammed the brakes on consumer spending. It continues to exceed expectations.”
Then, this week, in an essay posted to the Minneapolis Fed’s website, Kashkari put the odds of further Fed rate hikes, above and beyond an additional 25 basis point increase, at 40 percent. This, according to Kashkari, would be needed to get consumer price inflation back down to the Fed’s 2 percent target.
We’ll have more on the plight of the lowly consumer in just a moment. But first, let’s remember who Kashkari is, so as to better understand the words he speaks.
If you recall, about 15 years ago, as federal bailout chief, Kashkari functioned as the highly visible hand of the market. When the sky was falling in early-2009, he awoke each morning, put on his pants one leg at a time, drank his coffee, and rapidly funneled Treasury Secretary Hank Paulson’s $700 billion of TARP funds to the government’s preferred financial institutions.
Incidentally, the experience had a severe effect on Kashkari’s mental health. He lost his mind.
Shortly after blowing through the $700 billion Kashkari became a hermit and took to a cabin in the Sierra Nevada Mountains – near Donner Pass. There he pursued his other life’s purpose of chopping wood and burning it. We thought we’d seen the last of him.
Boom and Bust
Sadly, true believers are incapable of amiably exiting the trappings of public life for good. After a failed California gubernatorial campaign in 2014, losing to retread Governor Jerry Moonbeam Brown, Kashkari resurfaced as Minneapolis Fed President in 2016.
We presume this appointed position was Kashkari’s reward for the abuse heaped upon him from grandstanding Representatives – table pounders like Barney Frank and Maxine Waters – while handing out $700 billion in taxpayer dollars to Wall Street banks.
We don’t know how these appointment decisions are made. Perhaps someone in the executive branch made a phone call. The point is Kashkari is positioned at a post where he can exact maximum destruction on American citizens, as he pursues scientific management of the economy for the benefit of the central bank.
For real central planners like Kashkari, appointed positions are the crème de la crème. For the rest of us lowly wage earners these appointed positions come at a cost.
Central bankers, through their extreme intervention in credit markets, perpetuate a boom-and-bust cycle that’s far beyond anything which could ever occur under a gold standard with market determined interest rates.
In 2020-21, the Fed artificially pressed interest rates to nearly zero and flooded the economy with $5 trillion of infinite cash; thus, inflating consumer prices to a 40 year high. Since then, the Fed has hiked interest rates 5.25 percent and removed $1 trillion of its infinite cash.
Remember, the effects of rising interest rates take time. The economy is dynamic, and the infinite relationships and exchanges that occur are nonlinear.
Where Did Neel Kashkari’s Infinite Cash Go?
By this, the economy is a social system not a mechanical system. It doesn’t work as a teetertotter, where if you push down on one side the other side goes up.
Movements are erratic, often appear irrational, and are the result of countless competing points of stimulus.
The new regime of higher interest rates is currently filtering its way through all areas of the economy and financial markets. The cause and effect can appear delayed, as the movements are far from mechanical.
Kashkari’s excitement that consumer spending “continues to exceed expectations” in the face of rapid interest rate hikes will soon fade. The Fed’s yo-yoing of credit markets has set consumers up for untimely disaster.
First consumers were enticed by low interest rates to take on massive debt. Then, as consumer prices rocketed to the moon, more and more debt became essential to make ends meet. All the while, interest rates, as benchmarked by the 10 Year Treasury yield, have increased to 15-year highs.
At this point, and regardless of what Kashkari says, consumers are all tapped out. Any excess savings they managed to accumulate during the government lockdown are now gone.
This was the conclusion reached by Kashkari’s cohorts at the Federal Reserve Bank of San Francisco. The grim details were reported by Bloomberg earlier this week:
“Americans outside the wealthiest 20 percent of the country have run out of extra savings and now have less cash on hand than they did when the pandemic began.
“For the bottom 80 percent of households by income, bank deposits and other liquid assets were lower in June this year than they were in March 2020, after adjustment for inflation.
On top of that, U.S. credit card debt recently eclipsed the $1 trillion mark for the first time ever.
So, where did Kashkari’s infinite cash go?
Naturally, it was a lie all along. And with the turn of the credit cycle, it turned to infinite misery for broke, overindebted consumers.
[Editor’s note: Is the Pentagon secretly provoking China to attack Taiwan? Are your finances prepared for such madness? Answers to these important questions can be found in a unique Special Report. You can access a copy here for less than a penny.]
Sincerely,
MN Gordon
for Economic Prism
Return from Where Did Neel Kashkari’s Infinite Cash Go? to Economic Prism
This entry was posted in MN Gordon, Politics and tagged $700 billion, boom and bust, infinite cash, neel kashkari, tarp. Bookmark the permalink.
← Flying on a Wing and a Prayer
Coming Down from Cloud Cuckoo Land →
3 Responses to Where Did Neel Kashkari’s Infinite Cash Go?
- Pingback: Every Penny Will Be Pure – Beacon of Light
- https://secure.gravatar.com/avatar/0...40&d=blank&r=gH. L. M says:
October 1, 2023 at 3:43 am
This clown (Neel Kashkari) knows as much about “economics” and “monetary policy” as I do– maybe less– if that’s possible.
LOL
Reply - https://secure.gravatar.com/avatar/7...40&d=blank&r=gGKD says:
October 1, 2023 at 1:13 pm
The Fed and their policies have become a sickness similar to stage 4 cancer. As we near the end of the US economy, due to unbelievable incompetence, including our Politicians both Democrats and Republicans, the disease rapidly accelerates ultimately killing the Beast no different than a cancer patient succumbing to cancer. It’s sad and heartbreaking that this miracle of a Nation is living it’s last days when it never had to happen. God forgive us for such a disastrous and derelict of leadership.
- Post #12,556
- Quote
- Mar 21, 2024 6:32am Mar 21, 2024 6:32am
- | Commercial Member | Joined Dec 2014 | 11,787 Posts
https://ecp.yusercontent.com/mail?ur...JUE8iv1sAQ--~D
https://ecp.yusercontent.com/mail?ur...iqXSHJpN3w--~D
https://ecp.yusercontent.com/mail?ur...re2yHPOejA--~D
Today’s Points:
https://ecp.yusercontent.com/mail?ur...iqXSHJpN3w--~D
https://ecp.yusercontent.com/mail?ur...re2yHPOejA--~D
Today’s Points:
- The Fed could have been more hawkish, just like the BOJ
- The FOMC was un-hawkish enough to bring both the S&P 500 and the gold price to new records
- Dig deeper and the dot plot was more hawkish than the headlines
- AND: Your choice of climate anthems
Going Dotty
Maybe the Federal Reserve and the Bank of Japan have something in common after all. Earlier this week, the BOJ made the epochal decision to scrap negative rates and move slightly into positive territory for the first time in eight years, and abandoned a range of unconventional policies to make money run smoothly. A few weeks ago, moving above zero this early seemed extremely unlikely. But while its direction was hawkish, policy remained very, very lenient and was accompanied by an ambivalent press conference by the governor, Kazuo Ueda. Because the BOJ was so much less hawkish in its communications than it might have been, the historic move was greeted with declines for the yen and Japanese bond yields.
Ueda’s template has been repeated almost exactly by Jerome Powell and his colleagues on the Federal Open Market Committee. A month ago, the market viewed a March rate cut as a racing certainty. It was 100% priced in. Subsequent inflation and unemployment data have been far too strong to permit easing that soon, so all hope of a cut at this week’s meeting had been abandoned. What mattered was guidance for the future. That came crucially from the “dot plot” in which the FOMC members each give their predictions for future rates and economic numbers in the form of a dot. It was the dots, in combination with Powell’s press conference, that allowed the Fed to follow the BOJ strategy of hawkishness so reluctant that people sighed with relief.
The dot plot (which can be found here) has in the past been a great vehicle to signal changes in the Fed’s thinking. This time, the key measure that drove excitement was that the governors’ median estimate for the fed funds rate at the end of this year was unchanged, projecting three cuts. Now, we need to get into the weeds.
I’m continuing my practice of retrograde homemade graphics to analyze the dot plot. Don’t hold any of my brilliant data visualization colleagues responsible for what follows. Using the paint function, I’ve pasted the dots as they stood in the last plot in December on the left, and the latest on the right. I annotated it myself:
https://ecp.yusercontent.com/mail?ur...vpIAY37A1w--~D
You see immediately that nine members are lined up behind three cuts, which is more than three months ago. The median is unchanged. But now, only one governor thinks they’ll cut further than this, down from five, while a second is prepared to predict that there will be only one cut. In total, a net five governors reduced the number of cuts they predicted. That’s halfway to swinging the decision on a committee with 19 members. With nine members expecting two cuts or fewer, only one needs to change from here to raise the median.
If we use the mean rather than median, it rose by 11 basis points to 4.81%, which implies that two cuts from here are more likely than one. Further, the mean could have been lower but the median would have risen if only two governors had shifted, but both of them changed from three to two. A lot has been hanging on the abstruse statistical question of how to measure an average.
To add to this, the median did shift for the governors’ prediction for the end of 2025, from 3.6 to 3.9%. This wasn’t a hugely hawkish move by any standard. As expected, the Fed offered a nuanced set of projections that shifted very slightly in a hawkish direction. Just like the BOJ, it could have moved further, but didn’t. And that was great news for risk assets.
Then came the press conference. Powell made no hugely dovish pronouncements (unlike in December, when he was rightly perceived to have pivoted toward lower rates), but resolutely declined to say anything hawkish, either. For analysis, read Lisa Abramowicz’s hugely entertaining Surveillance newsletter. Perhaps most significantly, Powell was asked if he wanted to push back on the easing of broad financial conditions that has come with the stock market rally. He didn’t. For context, this is Bloomberg’s measure of financial conditions, and it’s almost as lenient as in 2021 when fed funds were being held at zero:
https://ecp.yusercontent.com/mail?ur...xKM84KprRQ--~D
Another indicator that the Fed isn’t too bothered was Powell’s lack of concern over the rise in predicted year-end inflation shown by the dot plot. Had he wanted to get a hawkish message across, he could have emphasized this or at least voiced concern, rather than dismiss recent disquietingly high inflation readings as “bumps.” As it was, the market concluded that the Fed didn’t care about inflation — or was perhaps surreptitiously giving up on lowering it to the official target of 2%. This chart, from the FOMC, shows how expectations for the personal consumption expenditures rate of inflation have shifted upward since December:
https://ecp.yusercontent.com/mail?ur...jYa5T7YEVA--~D
The dots aren’t a contractual commitment to do anything. Indeed, their track record since the Fed began publishing them 12 years ago has been very poor. For the most painful example, many noted that the median expectation for the neutral or long-term fed funds rate had ticked above 2.5%, for the first time since 2019:
https://ecp.yusercontent.com/mail?ur...URRlGqP2Ag--~D
Unfortunately, Fed governors are no better at predicting the future than the rest of us. Let’s take “long term” to mean four years into the future. This is what the FOMC predicted from 2012 to 2020, with the actual fed funds rate from four years later:
https://ecp.yusercontent.com/mail?ur...oyXfDfcL4A--~D
At no point has the fed funds rate been where the FOMC predicted. It stayed far lower than expected throughout the post-crisis decade, then exploded higher — though the governors can be forgiven for not predicting the pandemic. And 2.5% was as high as the rate ever reached in the pre-Covid years. It’s unlikely to fall very far in the future, no matter what the FOMC now thinks.
Rather than analyze the predictions, what’s at stake here is the Fed’s reaction function. Taken as a whole, for any given level of inflationary pressure in the data, it looks like the response will be abit more lenient than previously thought. The recent poor inflation numbers have only nudged the governors a little in the hawkish direction; it will take more of a pickup in prices to jolt enough members away from three cuts this year. If you’re that confident inflation is really coming down, fill your boots with stocks. If you’re not so confident, maybe buy gold.
- Post #12,557
- Quote
- Edited 11:27am Mar 21, 2024 10:24am | Edited 11:27am
- | Commercial Member | Joined Dec 2014 | 11,787 Posts
Did You Spot The Gorilla In The Fed's Meeting Room? | ZeroHedge
Did You Spot The Gorilla In The Fed's Meeting Room?
https://zh-prod-1cc738ca-7d3b-4a72-b.../picture-5.jpg
BY TYLER DURDEN
THURSDAY, MAR 21, 2024 - 08:25 AM
Authored by Simon White, Bloomberg macro strategist,
Monetary policy remains exceptionally loose given one of the fastest rate-hiking cycles seen. Pressure is likely to remain on rate expectations to move higher as the Federal Reserve reluctantly eases back on its December pivot, with the fed funds and SOFR futures curves continuing to steepen.
A famous experiment asks volunteers to watch a video of a basketball game and count the passes. Half way through, a gorilla strolls through the action. Almost no-one spots it, so focused they are on the game. As we count the dots and parse the language at this week’s Fed meeting, it’s easy miss the fact that policy overall remains very loose despite over 500 bps of rate hikes. The gorilla has gone by largely unnoticed.
The Fed held rates steady at 5.5% as expected and continued to project three rate cuts this year. But standing back and looking at the totality of monetary policy in this cycle, we can see that - far from conditions tightening - we have instead seen one of the biggest loosening of them in decades.
https://assets.zerohedge.com/s3fs-pu...?itok=FieN950s
The chart below shows the Effective Fed Rate: the policy rate, plus its expected change over the next year, plus the one-year change in Goldman Sachs’ Financial Conditions Index, which is calibrated to convert the move in stocks, equity volatility, credit spreads and so on to an equivalent change in the Fed’s rate.
As we can see, in the three prior rate-hiking cycles the Effective Rate tightened; this time the rate has loosened, by more than it has done in at least 30 years.
https://assets.zerohedge.com/s3fs-pu...?itok=1TG_G9Mo
It is against this backdrop the Fed’s pivot in December is even more inexplicable. By then it had become clear that a US recession was not imminent. Yet Jay Powell did not push back on the over six cuts that were priced in for 2024.
*POWELL: WE THINK FINANCIAL CONDITIONS ARE WEIGHING ON ECONOMY
dude, financial conditions are easier than when you started hiking
— zerohedge (@zerohedge) March 20, 2024
Since then inflation and growth data have come in better than expected. Still, though, the Fed may cut rates even if there is a smidge of an opening to do so. That would likely prove to be a mistake.
Typically the Effective Rate starts falling before the Fed makes its first cut and continues to fall after. This time around, the Effective Rate’s fall is already considerably steeper than normal – even before a cut is made. The Fed may end up spiking the punch bowl with more booze when the party is already quite tipsy.
https://assets.zerohedge.com/s3fs-pu...?itok=UOThUJab
The gorilla can be spotted in a number of different ways. Inflation has fallen, but it has done so largely despite the actions of the central bank, not because of them.
The San Francisco Fed splits core PCE inflation into a cyclical and an a cyclical component. Cyclical inflation is made up of the PCE sub-components most sensitive to Fed interest rates, and a cyclical is compiled from what’s left over, i.e. inflation that’s more influenced by non-Fed factors.
While cyclical inflation has fallen back to its pre-pandemic average, cyclical PCE remains at its 40-year high. The Wizard of the Fed has been pulling the rate-hiking levers, but they have done little to directly quell inflation.
https://assets.zerohedge.com/s3fs-pu...?itok=qymwEd4O
It’s even worse if we account for borrowing costs. Mortgage costs were taken out of CPI in 1983 and car repayments in 1998. In a recent NBER paper by Larry Summers et al, the authors reconstruct CPI to take account of housing borrowing costs.
Inflation on this measure not only peaked much higher than it did in the 1970s, it is still running at 8%. Again, the question lingering in the air is: … and the Fed is considering cutting rates?
https://assets.zerohedge.com/s3fs-pu...?itok=H6gnnCg9
Source: NBER Working Paper 32163
(The main point of the paper is that the reason consumer sentiment indices have been depressed despite falling inflation is that they do include the impact of higher borrowing costs.)
If monetary policy was operating in the way expected, we would expect to see more slack in the economy. Yet this has signally failed to happen. The index of spare labor capacity – composed of the unemployment rate and productivity - has fallen only marginally and remains stuck at 50-year highs.
https://assets.zerohedge.com/s3fs-pu...?itok=aEjDbey-
Other measures of slack, including capacity utilization and job openings as a percentage of the unemployed are still near highs or remain historically very elevated.
Against this backdrop, a Fed cut looks distinctly unwise.
https://assets.zerohedge.com/s3fs-pu...?itok=1m0FWMs9
Why did we not see a bigger rise in unemployment or drop in job openings despite the steep rate-hiking cycle? In short, massive government deficits allowed job hoarding.
The Kalecki-Levy equation illustrates the link between corporate profits and private and foreign-sector savings. Simply put, the more the household or government sectors dissave, i.e. spend, the higher are profit margins.
In this cycle, it has been the government’s dissaving that has allowed the corporate sector in aggregate to grow profits and - capitalizing on monopolization and the unique economic disruption seen in the wake of the pandemic - expand profit margins.
https://assets.zerohedge.com/s3fs-pu...?itok=WaRudP4v
It’s for the same reason that EPS growth has bounced back. (Buybacks also play a part here, but they too tend to happen when companies’ profits are growing, which is much easier when the government is spending like a drunken sailor.) As the chart below shows, there is a strong relationship between EPS and job openings, with EPS growth recently turning back up.
https://assets.zerohedge.com/s3fs-pu...?itok=N5VmkZj_
With such little movement on slack, no wonder the fall in inflation was due to factors outside of the Fed’s direct influence, most notably China’s glacial recovery. But that leaves markets in an increasingly precarious spot.
Inflation likely lulled the Fed into a false in of security when it performed its policy pirouette in December. But as was clear then and is clear now, this CPI movie isn’t over yet. Furthermore, any recession the Fed may have been wanting to circumvent continues to look off the cards for the next 3-6 months.
Yet the bank may still cut rates, on a limited pretext, so confident they sounded last year that they would. That will inflame stock and other asset-bubble risks even more, at a time when we already have bitcoin making new highs and a dog “wif” a hat buying ad space on the Las Vegas Sphere.
Gorillas playing basketball is a very odd thing; the Fed cutting rates before the last quarter of this year would be even odder. Before then, though, markets are likely to try to re-impose some sobriety by reducing or eliminating the number of rate cuts priced in.
Did You Spot The Gorilla In The Fed's Meeting Room?
https://zh-prod-1cc738ca-7d3b-4a72-b.../picture-5.jpg
BY TYLER DURDEN
THURSDAY, MAR 21, 2024 - 08:25 AM
Authored by Simon White, Bloomberg macro strategist,
Monetary policy remains exceptionally loose given one of the fastest rate-hiking cycles seen. Pressure is likely to remain on rate expectations to move higher as the Federal Reserve reluctantly eases back on its December pivot, with the fed funds and SOFR futures curves continuing to steepen.
A famous experiment asks volunteers to watch a video of a basketball game and count the passes. Half way through, a gorilla strolls through the action. Almost no-one spots it, so focused they are on the game. As we count the dots and parse the language at this week’s Fed meeting, it’s easy miss the fact that policy overall remains very loose despite over 500 bps of rate hikes. The gorilla has gone by largely unnoticed.
The Fed held rates steady at 5.5% as expected and continued to project three rate cuts this year. But standing back and looking at the totality of monetary policy in this cycle, we can see that - far from conditions tightening - we have instead seen one of the biggest loosening of them in decades.
https://assets.zerohedge.com/s3fs-pu...?itok=FieN950s
The chart below shows the Effective Fed Rate: the policy rate, plus its expected change over the next year, plus the one-year change in Goldman Sachs’ Financial Conditions Index, which is calibrated to convert the move in stocks, equity volatility, credit spreads and so on to an equivalent change in the Fed’s rate.
As we can see, in the three prior rate-hiking cycles the Effective Rate tightened; this time the rate has loosened, by more than it has done in at least 30 years.
https://assets.zerohedge.com/s3fs-pu...?itok=1TG_G9Mo
It is against this backdrop the Fed’s pivot in December is even more inexplicable. By then it had become clear that a US recession was not imminent. Yet Jay Powell did not push back on the over six cuts that were priced in for 2024.
*POWELL: WE THINK FINANCIAL CONDITIONS ARE WEIGHING ON ECONOMY
dude, financial conditions are easier than when you started hiking
— zerohedge (@zerohedge) March 20, 2024
Since then inflation and growth data have come in better than expected. Still, though, the Fed may cut rates even if there is a smidge of an opening to do so. That would likely prove to be a mistake.
Typically the Effective Rate starts falling before the Fed makes its first cut and continues to fall after. This time around, the Effective Rate’s fall is already considerably steeper than normal – even before a cut is made. The Fed may end up spiking the punch bowl with more booze when the party is already quite tipsy.
https://assets.zerohedge.com/s3fs-pu...?itok=UOThUJab
The gorilla can be spotted in a number of different ways. Inflation has fallen, but it has done so largely despite the actions of the central bank, not because of them.
The San Francisco Fed splits core PCE inflation into a cyclical and an a cyclical component. Cyclical inflation is made up of the PCE sub-components most sensitive to Fed interest rates, and a cyclical is compiled from what’s left over, i.e. inflation that’s more influenced by non-Fed factors.
While cyclical inflation has fallen back to its pre-pandemic average, cyclical PCE remains at its 40-year high. The Wizard of the Fed has been pulling the rate-hiking levers, but they have done little to directly quell inflation.
https://assets.zerohedge.com/s3fs-pu...?itok=qymwEd4O
It’s even worse if we account for borrowing costs. Mortgage costs were taken out of CPI in 1983 and car repayments in 1998. In a recent NBER paper by Larry Summers et al, the authors reconstruct CPI to take account of housing borrowing costs.
Inflation on this measure not only peaked much higher than it did in the 1970s, it is still running at 8%. Again, the question lingering in the air is: … and the Fed is considering cutting rates?
https://assets.zerohedge.com/s3fs-pu...?itok=H6gnnCg9
Source: NBER Working Paper 32163
(The main point of the paper is that the reason consumer sentiment indices have been depressed despite falling inflation is that they do include the impact of higher borrowing costs.)
If monetary policy was operating in the way expected, we would expect to see more slack in the economy. Yet this has signally failed to happen. The index of spare labor capacity – composed of the unemployment rate and productivity - has fallen only marginally and remains stuck at 50-year highs.
https://assets.zerohedge.com/s3fs-pu...?itok=aEjDbey-
Other measures of slack, including capacity utilization and job openings as a percentage of the unemployed are still near highs or remain historically very elevated.
Against this backdrop, a Fed cut looks distinctly unwise.
https://assets.zerohedge.com/s3fs-pu...?itok=1m0FWMs9
Why did we not see a bigger rise in unemployment or drop in job openings despite the steep rate-hiking cycle? In short, massive government deficits allowed job hoarding.
The Kalecki-Levy equation illustrates the link between corporate profits and private and foreign-sector savings. Simply put, the more the household or government sectors dissave, i.e. spend, the higher are profit margins.
In this cycle, it has been the government’s dissaving that has allowed the corporate sector in aggregate to grow profits and - capitalizing on monopolization and the unique economic disruption seen in the wake of the pandemic - expand profit margins.
https://assets.zerohedge.com/s3fs-pu...?itok=WaRudP4v
It’s for the same reason that EPS growth has bounced back. (Buybacks also play a part here, but they too tend to happen when companies’ profits are growing, which is much easier when the government is spending like a drunken sailor.) As the chart below shows, there is a strong relationship between EPS and job openings, with EPS growth recently turning back up.
https://assets.zerohedge.com/s3fs-pu...?itok=N5VmkZj_
With such little movement on slack, no wonder the fall in inflation was due to factors outside of the Fed’s direct influence, most notably China’s glacial recovery. But that leaves markets in an increasingly precarious spot.
Inflation likely lulled the Fed into a false in of security when it performed its policy pirouette in December. But as was clear then and is clear now, this CPI movie isn’t over yet. Furthermore, any recession the Fed may have been wanting to circumvent continues to look off the cards for the next 3-6 months.
Yet the bank may still cut rates, on a limited pretext, so confident they sounded last year that they would. That will inflame stock and other asset-bubble risks even more, at a time when we already have bitcoin making new highs and a dog “wif” a hat buying ad space on the Las Vegas Sphere.
Gorillas playing basketball is a very odd thing; the Fed cutting rates before the last quarter of this year would be even odder. Before then, though, markets are likely to try to re-impose some sobriety by reducing or eliminating the number of rate cuts priced in.
- Post #12,558
- Quote
- Mar 21, 2024 6:13pm Mar 21, 2024 6:13pm
- | Commercial Member | Joined Dec 2014 | 11,787 Posts
- Post #12,559
- Quote
- Edited 6:31pm Mar 21, 2024 6:19pm | Edited 6:31pm
- | Commercial Member | Joined Dec 2014 | 11,787 Posts
The REAL Reason the Market’s Soaring
Annapolis, Maryland
https://ecp.yusercontent.com/mail?ur...0frcWirV1g--~D
BRIAN
MAHER
Dear Bruce,
The Federal Reserve began kinking its monetary hose two years back.
This is done through fevered interest rate elevations and quantitative tightening.
Yet the stock market put out its tongue, placed its thumbs in its ears, and wiggled its fingers in Mr. Powell’s face.
It has gone streaking to record heights — despite the Federal Reserve’s kinks.
A conundrum! Or is it?
We are informed that financial conditions are presently extravagant.
They are among the loosest in several decades. Mr. Simon White of Bloomberg:
Monetary policy remains exceptionally loose given one of the fastest rate-hiking cycles seen… policy overall remains very loose despite over 500 basis points of rate hikes…
Standing back and looking at the totality of monetary policy in this cycle, we can see that — far from conditions tightening — we have instead seen one of the biggest loosening's of them in decades.
Graphic Evidence
Is it evidence you seek? Then it is evidence you shall have:
https://ecp.yusercontent.com/mail?ur...NOH8C2aC6A--~D
Source: Bloomberg
The steeply ascending red represents the Federal Reserve’s target rate.
The largely descending blue represents financial conditions as Bloomberg gauges them.
The Federal Reserve has undertaken four rate elevation cycles within the past 30 years.
None has yielded a greater financial loosening than the present cycle. Again, the graphic evidence:
https://ecp.yusercontent.com/mail?ur...ZZWDfqHNNg--~D
Source: Bloomberg
The black represents the hiking cycles. The gold represents financial conditions.
As demonstrated, the present cycle represents the “biggest effective loosening seen.”
How do you explain it?
It’s All About the “Pivot”
Here Mr. Joe Weisenthal and Ms. Tracy Alloway — they of the Odd Lots newsletter — hazard an attempt:
It certainly feels like there’s a pattern where the mere whisper of rate cuts sparks easier financial conditions (as markets rally), while hawkish moves seem to do hardly anything…
As Viktor Shvets over at Macquarie put it this week: “Any hint of the Fed considering an even minor pivot significantly eases financial conditions while a more hawkish tone only barely tightens.”
We believe there is justice here.
Nvidia’s 100X Announcement
https://ecp.yusercontent.com/mail?ur...quv_0FgHwg--~D
The world’s indisputable #1 AI stock made an announcement today that will accelerate the AI Wealth Window into OVERDRIVE...
Let’s just say that they’ve got a brand-new microchip up their sleeves that could spur the largest economic surge in US history.
Click Here For The Full Story
Further disentangling this perplexing knot — perhaps — is a certain Stephane Renevier.
Interest rates aren’t the be-all and end-all of financial conditions. Yes, higher rates generally mean pricier loans — but there are a whole lot of other factors that affect how easy or tough it is for firms and everyday folks to get financing and keep the economic show on the road.
Think about the cost for companies to borrow (credit spreads), how well the stock market is doing (that’s another source of financing), and how strong the dollar is (a weaker dollar means cheaper loans for people around the world who take on debt in greenbacks, pumping more cash into the global economy).
Since the end of last year, all those factors have turned more positive and have offset the U.S.’ towering interest rates, making financial conditions looser, not tighter.
So That Explains It
The stock market ebbs and flows with shifting financial conditions… as the tide ebbs and flows with the moon’s shifting senses of humor.
Is it a wonder — then — that the stock market has ebbed with the ebbing financial tide?
We hazard it is no wonder whatsoever.
For financial conditions are as loose and lax as a harlot’s virtue — if not looser and laxer.
Yet the Federal Reserve believes it has guarded its virtue with fantastic ferocity.
It believes its anti-inflationary whim-whams have choked financial conditions nearly to death. Mr. Powell yesterday:
“We think financial conditions are weighing on the economy.”
Has this fellow trained his eyes upon the figures?
We must conclude he has not. Or — or — he is aware of them and intends to depress rates regardless.
For what purpose… we are reduced to speculation. We do not know.
How Easy Will Conditions Be When the Fed Lowers Rates?
This we do know:
Wall Street heavily expects the Federal Reserve to soon execute its cherished pivot — perhaps in June.
And we believe Wall Street is correct. The Federal Reserve will soon commence its rate-depressing campaign.
And so a question rises into the air:
If financial conditions are lenient while rates have taken an extended hike… how much more lenient will they be once the Federal Reserve depresses rates?
Will they rocket the stock market to truly cosmic heights? Will they kindle inflation’s flames?
“I Am Deeply Disturbed by the Impending Aftermath of the Presidential Election.”
https://ecp.yusercontent.com/mail?ur...gVXPaevTaQ--~D
No one has been properly warned of the election threat facing our nation – until now.
Former White House Advisor Jim Rickards explains the disturbing future that awaits us in November.
Click Here
The above-cited Renevier:
Since easier financial conditions are like steroids for the economy, and inflation is a result of stronger economic growth, it makes sense that investors are expecting inflation to rise again.
Now, that does go against what the Federal Reserve says it’s trying to achieve — i.e. keeping inflation around its 2% target. And if the central bank does cut interest rates three times this year, as it suggested just this week, that could lead to even cushier financial conditions — and further stoke the risk of an inflation comeback.
We contest the claim that inflation is the consequence of economic growth. We nonetheless permit the case to proceed…
The Fed’s Walking a Razor-Thin Line
These policymakers are betting that inflation will dial down as the job market cools, and are probably expecting those other factors (credit spreads, the stocks’ rally, and dollar weakness) to mellow out too — all of which could take some heat off inflation. But at the same time, they’re also placing a wager on stronger economic growth. It’s a razor-thin line they’re trying to walk.
And in the meantime, we’re in a weird spot: economic growth picking up, inflation flirting with a comeback, and financial conditions easing way more than you’d expect, given where interest rates are. That mixed vibe is why oil and copper prices are on a tear (they both like strong growth and a whiff of inflation), why gold and Bitcoin are hitting it big (they’re the cool kids when financial conditions loosen and inflation flexes), and why stocks are smashing it against all odds (they thrive on robust growth and easy money conditions, and aren’t overly bothered by inflation).
We might not be in this peculiar position for long: Inflation could turn the heat way up, and put financial conditions into a deep freeze, and all of that could put a damper on growth.
But for now, the party’s on.
The Fed’s Party Won’t End Well
What will Mr. Powell and his mates do then?
Yet then is then and now is.
Indeed… for now… the party is on.
Today the balloons and streamers were abundant within 11 Wall Street — the New York Stock Exchange — as the major indexes once again went rampaging.
We nonetheless decline the invitation.
That is because the Federal Reserve is this party’s host. And we do not trust its management of the liquor that sustains it.
We hazard the attendees… presently thrilling to alcoholic excitements… are in for one royal hangover.
Regards,
https://ecp.yusercontent.com/mail?ur...slax8qL6sw--~D
Brian Maher
Managing Editor, The Daily Reckoning
[email protected].
Editor’s note: Well, the party is on. And there’s plenty of fun to be had as long as it lasts.
Why not join the fun? And the party is about to get more fun.
For the last few days, AI wizard James Altucher has been warning you about a critical AI announcement from Nvidia.
And guess what? It just happened.
That’s why we want to give you one last chance to watch James’ urgent video on what’s happening here.
Because Nvidia didn’t just unveil the most advanced AI microchip in the world…
They also created a virtual monopoly for a different AI company — a very small one.
After today, this tiny AI stock could go ballistic.
That’s why you need to watch this video before MIDNIGHT.
After that, it comes down.
It’s time to party. Click here now to learn how to join it.
Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [email protected].
https://ecp.yusercontent.com/mail?ur...TpUVCzFQRQ--~D
Brian Maher is the Daily Reckoning's Managing Editor. Before signing on to Agora Financial, he was an independent researcher and writer who covered economics, politics and international affairs. His work has appeared in the Asia Times and other news outlets around the world. He holds a Master's degree in Defense & Strategic Studies
Annapolis, Maryland
https://ecp.yusercontent.com/mail?ur...0frcWirV1g--~D
BRIAN
MAHER
Dear Bruce,
The Federal Reserve began kinking its monetary hose two years back.
This is done through fevered interest rate elevations and quantitative tightening.
Yet the stock market put out its tongue, placed its thumbs in its ears, and wiggled its fingers in Mr. Powell’s face.
It has gone streaking to record heights — despite the Federal Reserve’s kinks.
A conundrum! Or is it?
We are informed that financial conditions are presently extravagant.
They are among the loosest in several decades. Mr. Simon White of Bloomberg:
Monetary policy remains exceptionally loose given one of the fastest rate-hiking cycles seen… policy overall remains very loose despite over 500 basis points of rate hikes…
Standing back and looking at the totality of monetary policy in this cycle, we can see that — far from conditions tightening — we have instead seen one of the biggest loosening's of them in decades.
Graphic Evidence
Is it evidence you seek? Then it is evidence you shall have:
https://ecp.yusercontent.com/mail?ur...NOH8C2aC6A--~D
Source: Bloomberg
The steeply ascending red represents the Federal Reserve’s target rate.
The largely descending blue represents financial conditions as Bloomberg gauges them.
The Federal Reserve has undertaken four rate elevation cycles within the past 30 years.
None has yielded a greater financial loosening than the present cycle. Again, the graphic evidence:
https://ecp.yusercontent.com/mail?ur...ZZWDfqHNNg--~D
Source: Bloomberg
The black represents the hiking cycles. The gold represents financial conditions.
As demonstrated, the present cycle represents the “biggest effective loosening seen.”
How do you explain it?
It’s All About the “Pivot”
Here Mr. Joe Weisenthal and Ms. Tracy Alloway — they of the Odd Lots newsletter — hazard an attempt:
It certainly feels like there’s a pattern where the mere whisper of rate cuts sparks easier financial conditions (as markets rally), while hawkish moves seem to do hardly anything…
As Viktor Shvets over at Macquarie put it this week: “Any hint of the Fed considering an even minor pivot significantly eases financial conditions while a more hawkish tone only barely tightens.”
We believe there is justice here.
Nvidia’s 100X Announcement
https://ecp.yusercontent.com/mail?ur...quv_0FgHwg--~D
The world’s indisputable #1 AI stock made an announcement today that will accelerate the AI Wealth Window into OVERDRIVE...
Let’s just say that they’ve got a brand-new microchip up their sleeves that could spur the largest economic surge in US history.
Click Here For The Full Story
Further disentangling this perplexing knot — perhaps — is a certain Stephane Renevier.
Interest rates aren’t the be-all and end-all of financial conditions. Yes, higher rates generally mean pricier loans — but there are a whole lot of other factors that affect how easy or tough it is for firms and everyday folks to get financing and keep the economic show on the road.
Think about the cost for companies to borrow (credit spreads), how well the stock market is doing (that’s another source of financing), and how strong the dollar is (a weaker dollar means cheaper loans for people around the world who take on debt in greenbacks, pumping more cash into the global economy).
Since the end of last year, all those factors have turned more positive and have offset the U.S.’ towering interest rates, making financial conditions looser, not tighter.
So That Explains It
The stock market ebbs and flows with shifting financial conditions… as the tide ebbs and flows with the moon’s shifting senses of humor.
Is it a wonder — then — that the stock market has ebbed with the ebbing financial tide?
We hazard it is no wonder whatsoever.
For financial conditions are as loose and lax as a harlot’s virtue — if not looser and laxer.
Yet the Federal Reserve believes it has guarded its virtue with fantastic ferocity.
It believes its anti-inflationary whim-whams have choked financial conditions nearly to death. Mr. Powell yesterday:
“We think financial conditions are weighing on the economy.”
Has this fellow trained his eyes upon the figures?
We must conclude he has not. Or — or — he is aware of them and intends to depress rates regardless.
For what purpose… we are reduced to speculation. We do not know.
How Easy Will Conditions Be When the Fed Lowers Rates?
This we do know:
Wall Street heavily expects the Federal Reserve to soon execute its cherished pivot — perhaps in June.
And we believe Wall Street is correct. The Federal Reserve will soon commence its rate-depressing campaign.
And so a question rises into the air:
If financial conditions are lenient while rates have taken an extended hike… how much more lenient will they be once the Federal Reserve depresses rates?
Will they rocket the stock market to truly cosmic heights? Will they kindle inflation’s flames?
“I Am Deeply Disturbed by the Impending Aftermath of the Presidential Election.”
https://ecp.yusercontent.com/mail?ur...gVXPaevTaQ--~D
No one has been properly warned of the election threat facing our nation – until now.
Former White House Advisor Jim Rickards explains the disturbing future that awaits us in November.
Click Here
The above-cited Renevier:
Since easier financial conditions are like steroids for the economy, and inflation is a result of stronger economic growth, it makes sense that investors are expecting inflation to rise again.
Now, that does go against what the Federal Reserve says it’s trying to achieve — i.e. keeping inflation around its 2% target. And if the central bank does cut interest rates three times this year, as it suggested just this week, that could lead to even cushier financial conditions — and further stoke the risk of an inflation comeback.
We contest the claim that inflation is the consequence of economic growth. We nonetheless permit the case to proceed…
The Fed’s Walking a Razor-Thin Line
These policymakers are betting that inflation will dial down as the job market cools, and are probably expecting those other factors (credit spreads, the stocks’ rally, and dollar weakness) to mellow out too — all of which could take some heat off inflation. But at the same time, they’re also placing a wager on stronger economic growth. It’s a razor-thin line they’re trying to walk.
And in the meantime, we’re in a weird spot: economic growth picking up, inflation flirting with a comeback, and financial conditions easing way more than you’d expect, given where interest rates are. That mixed vibe is why oil and copper prices are on a tear (they both like strong growth and a whiff of inflation), why gold and Bitcoin are hitting it big (they’re the cool kids when financial conditions loosen and inflation flexes), and why stocks are smashing it against all odds (they thrive on robust growth and easy money conditions, and aren’t overly bothered by inflation).
We might not be in this peculiar position for long: Inflation could turn the heat way up, and put financial conditions into a deep freeze, and all of that could put a damper on growth.
But for now, the party’s on.
The Fed’s Party Won’t End Well
What will Mr. Powell and his mates do then?
Yet then is then and now is.
Indeed… for now… the party is on.
Today the balloons and streamers were abundant within 11 Wall Street — the New York Stock Exchange — as the major indexes once again went rampaging.
We nonetheless decline the invitation.
That is because the Federal Reserve is this party’s host. And we do not trust its management of the liquor that sustains it.
We hazard the attendees… presently thrilling to alcoholic excitements… are in for one royal hangover.
Regards,
https://ecp.yusercontent.com/mail?ur...slax8qL6sw--~D
Brian Maher
Managing Editor, The Daily Reckoning
[email protected].
Editor’s note: Well, the party is on. And there’s plenty of fun to be had as long as it lasts.
Why not join the fun? And the party is about to get more fun.
For the last few days, AI wizard James Altucher has been warning you about a critical AI announcement from Nvidia.
And guess what? It just happened.
That’s why we want to give you one last chance to watch James’ urgent video on what’s happening here.
Because Nvidia didn’t just unveil the most advanced AI microchip in the world…
They also created a virtual monopoly for a different AI company — a very small one.
After today, this tiny AI stock could go ballistic.
That’s why you need to watch this video before MIDNIGHT.
After that, it comes down.
It’s time to party. Click here now to learn how to join it.
Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [email protected].
https://ecp.yusercontent.com/mail?ur...TpUVCzFQRQ--~D
Brian Maher is the Daily Reckoning's Managing Editor. Before signing on to Agora Financial, he was an independent researcher and writer who covered economics, politics and international affairs. His work has appeared in the Asia Times and other news outlets around the world. He holds a Master's degree in Defense & Strategic Studies
- Post #12,560
- Quote
- Mar 21, 2024 6:35pm Mar 21, 2024 6:35pm
- | Commercial Member | Joined Dec 2014 | 11,787 Posts
Americans Awaken To “Now Is The Time Of Monsters” Reality (whatdoesitmean.com)
https://www.whatdoesitmean.com/logo322.jpg
World's Largest English Language News Service with Over 500 Articles Updated Daily
"The News You Need Today…For The World You’ll Live In Tomorrow."
Americans Awaken To “Now Is The Time Of Monsters” Reality
https://www.whatdoesitmean.com/pppz2.jpghttps://www.whatdoesitmean.com/pppz1.jpghttps://www.whatdoesitmean.com/ujk1.jpg
“The world is run by monsters and you have to deal with them. Some of them run countries, some of them run banks, some of them run news corporations.”
Ken Livingstone (born 17 June 1945) English retired politician who served as the Leader of the Greater London Council from 1981 until the council was abolished in 1986, and as Mayor of London from the creation of the office in 2000 until 2008.
.
.
Special Report from Sister Ciara
My Dearest Friends:
Vladimir Putin was officially declared Russia’s president-elect today, and the Central Election Commission of the Russian Federation revealed he received 87.28% of the votes cast—after which President Putin addressed the nation in a televised speech. [Note: President Putin’s address begins at the 30 second mark in the below video.]
Following this announcement, Professor Nicolai Petro of political science at the University of Rhode Island stated: “I think the election results pretty accurately reflect the desires of the Russian people and it’s hard to come up with any evidence to the contrary...In Western media you will find contrary opinions, but you cannot find any evidence”.
The “contrary opinions” in the Western media about President Putin’s election victory are blatant lies deliberately designed to distort reality—this is proven by the Russian independent, nongovernmental polling and sociological research organization Levada Center, that was labeled a foreign agent under the 2012 Russian foreign agent law becauseit is funded by the United States government, and in its poll released just before the election, revealed that President Putin had a 86% approval rating, which near exactly matches the percentage of votes he received.
https://www.whatdoesitmean.com/pwe23.png
The consequences of a government and complicit media deliberately lying to distort reality can’t be hidden, as evidenced by the Wall Street Journal reporting: “The U.S. has fallen out of the top 20 happiest countries for the first time since a global ranking began in 2012, due in large part to a drop in happiness among younger adults”—and further evidenced by NBC News revealing about what’s happening in America: “Researchers say the number of preppers has doubled in size to about 20 million since 2017...Much of that growth is from minorities and people considered left-of-center politically”.
I doubt that hardly any of you know about the American real estate giant MC Companies, which manages over 8,000 apartment homes—but is important for you to know about because its CEO Ken McElroy posted the video “What My 10,000 Tenants Tell Us About The Economy”, wherein it reveals the truth kept hidden by the reality distorting government and its complicit fake news media.
https://www.whatdoesitmean.com/pwe24.png
When the First Industrial Revolution began violently upending the established world order in the 1820s, it saw President John Quincy Adams wisely declaring: “America does not go abroad in search of monsters to destroy”—as World War I began violently upending the established world order a century later in the early 20th Century, it saw Italian socialist philosopher Antonio Gramsci warning: “The old world is dying, and the new world struggles to be born: now is the time of monsters”—and as the current established world order is being violently upended here in the early 21st Century, retired British political leader Ken Livingstone truthfully observed: “The world is run by monsters and you have to deal with them...Some of them run countries, some of them run banks, some of them run news corporations”.
https://www.whatdoesitmean.com/pwe25.png
The “time of monsters” always appears when the established world is changing, and those clinging to the old world order that is ending will distort reality to hold on to power, no matter how many lives they have to destroy.
Your only defense against these “monsters” is truthful knowledge and facts, that you use to plan for what is to come in order to protect yourself and your loved ones.
For those that allow their reality to be distorted by government and fake news media propaganda, however, they have no protection whatsoever from what is coming for them.
My Dear Sisters work unceasingly risking everything to provide you with the truthful knowledge and facts needed for protection against reality distorting lies, but today desperately need your kind and generous support to keep their mission ongoing, that you can provide by going below and giving what you can..
For those of you knowing these true things, I urgently plead for your support in our desperate hour of need, and is why I’ve always strongly reminded my Dearest Friends, if you prefer being lied to and deceived then, by all means, turn away from us, but, for those of you still wanting the truth, never forget that in aiding us, or others like us, our Dear Lordgave you this solemn promise: “Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you.”
With God,
Sister Ciara
Dublin, Ireland
21 March 2024
Our needs today are dire indeed, but, if every one of you reading this gave just $20.00 today, our budget for the entire year would be met! So, before you click away, ask yourself this simple question….if your knowing the truth about what is happening now, and what will be happening in the future isn’t worth 5 US pennies a day what is?
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(Please note that those who respond to this appeal, in any amount, will receive, at no charge, Sorcha Faal’s March, 2024/April, 2024 lecture series to the Sisters of the Order titled “Total War: the Collapse of the United States and the Rise of Chaos: Part 144”. This is another one of the Sorcha Faal’s most important lectures dealing with the coming timelines of war, famine, catastrophic Earth changes and disease as predicted by ancient prophecies.)
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Americans Awaken To “Now Is The Time Of Monsters” Reality
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“The world is run by monsters and you have to deal with them. Some of them run countries, some of them run banks, some of them run news corporations.”
Ken Livingstone (born 17 June 1945) English retired politician who served as the Leader of the Greater London Council from 1981 until the council was abolished in 1986, and as Mayor of London from the creation of the office in 2000 until 2008.
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Special Report from Sister Ciara
My Dearest Friends:
Vladimir Putin was officially declared Russia’s president-elect today, and the Central Election Commission of the Russian Federation revealed he received 87.28% of the votes cast—after which President Putin addressed the nation in a televised speech. [Note: President Putin’s address begins at the 30 second mark in the below video.]
Following this announcement, Professor Nicolai Petro of political science at the University of Rhode Island stated: “I think the election results pretty accurately reflect the desires of the Russian people and it’s hard to come up with any evidence to the contrary...In Western media you will find contrary opinions, but you cannot find any evidence”.
The “contrary opinions” in the Western media about President Putin’s election victory are blatant lies deliberately designed to distort reality—this is proven by the Russian independent, nongovernmental polling and sociological research organization Levada Center, that was labeled a foreign agent under the 2012 Russian foreign agent law becauseit is funded by the United States government, and in its poll released just before the election, revealed that President Putin had a 86% approval rating, which near exactly matches the percentage of votes he received.
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The consequences of a government and complicit media deliberately lying to distort reality can’t be hidden, as evidenced by the Wall Street Journal reporting: “The U.S. has fallen out of the top 20 happiest countries for the first time since a global ranking began in 2012, due in large part to a drop in happiness among younger adults”—and further evidenced by NBC News revealing about what’s happening in America: “Researchers say the number of preppers has doubled in size to about 20 million since 2017...Much of that growth is from minorities and people considered left-of-center politically”.
I doubt that hardly any of you know about the American real estate giant MC Companies, which manages over 8,000 apartment homes—but is important for you to know about because its CEO Ken McElroy posted the video “What My 10,000 Tenants Tell Us About The Economy”, wherein it reveals the truth kept hidden by the reality distorting government and its complicit fake news media.
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When the First Industrial Revolution began violently upending the established world order in the 1820s, it saw President John Quincy Adams wisely declaring: “America does not go abroad in search of monsters to destroy”—as World War I began violently upending the established world order a century later in the early 20th Century, it saw Italian socialist philosopher Antonio Gramsci warning: “The old world is dying, and the new world struggles to be born: now is the time of monsters”—and as the current established world order is being violently upended here in the early 21st Century, retired British political leader Ken Livingstone truthfully observed: “The world is run by monsters and you have to deal with them...Some of them run countries, some of them run banks, some of them run news corporations”.
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The “time of monsters” always appears when the established world is changing, and those clinging to the old world order that is ending will distort reality to hold on to power, no matter how many lives they have to destroy.
Your only defense against these “monsters” is truthful knowledge and facts, that you use to plan for what is to come in order to protect yourself and your loved ones.
For those that allow their reality to be distorted by government and fake news media propaganda, however, they have no protection whatsoever from what is coming for them.
My Dear Sisters work unceasingly risking everything to provide you with the truthful knowledge and facts needed for protection against reality distorting lies, but today desperately need your kind and generous support to keep their mission ongoing, that you can provide by going below and giving what you can..
For those of you knowing these true things, I urgently plead for your support in our desperate hour of need, and is why I’ve always strongly reminded my Dearest Friends, if you prefer being lied to and deceived then, by all means, turn away from us, but, for those of you still wanting the truth, never forget that in aiding us, or others like us, our Dear Lordgave you this solemn promise: “Give, and it will be given to you. A good measure, pressed down, shaken together and running over, will be poured into your lap. For with the measure you use, it will be measured to you.”
With God,
Sister Ciara
Dublin, Ireland
21 March 2024
Our needs today are dire indeed, but, if every one of you reading this gave just $20.00 today, our budget for the entire year would be met! So, before you click away, ask yourself this simple question….if your knowing the truth about what is happening now, and what will be happening in the future isn’t worth 5 US pennies a day what is?
https://www.whatdoesitmean.com/do37.jpg
(Please note that those who respond to this appeal, in any amount, will receive, at no charge, Sorcha Faal’s March, 2024/April, 2024 lecture series to the Sisters of the Order titled “Total War: the Collapse of the United States and the Rise of Chaos: Part 144”. This is another one of the Sorcha Faal’s most important lectures dealing with the coming timelines of war, famine, catastrophic Earth changes and disease as predicted by ancient prophecies.)
Continue To Main News Site