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Shift from T-Bonds and into Commodities & Gold?
Long-term US-Treasury notes have lost two-thirds of their relative market value, when compared to hard-money, - Gold, over the past six years. Beijing has made a tragic mistake, by investing two-thirds of its $2.5-trillion FX stash into US-bonds. Trying to figure out how Beijing and other central banks, will invest their FX-stash in the months ahead, is the topic of the Sept 8th edition of the Global Money Trends newsletter.
British Gilts vs Gold, - vying for “Safe Haven” Money
Ten-year gilt yields have fallen steadily from as high as 4.25% set in February, when worries about Britain’s record budget deficit were at their peak. The yield spread between the British 10-year gilt and the 1-year T-bill rate has shrunk by 130-basis points, to +225-bps today. The last time the yield spread was this narrow, the global economy was at risk of sliding into a 1930’s style depression.
Japanese style Deflation Strikes Global Bond markets
The US-economy has not experienced sustained deflation since the Great Depression of the 1930’s, when consumer prices fell 10% between 1929 and 1933. But Japan has been battling falling prices since 1995. Central bankers and macro-economists from all corners of the earth have studied Japan’s descent from its giddy economic prosperity in the 1980’s, and into the deflation trap in the 1990’s, that Tokyo’s financial warlords have still been unable to remedy.
The Fed Flashes the Nuclear QE Trump Card
Of ten people who hear the same story or speech, each one might understand it differently. Perhaps, only one of them will understand it correctly. Bernanke acknowledged that the US-economy faces an “unusually uncertain time,” but if necessary, he hinted the central bank would resort to “Quantitative Easing,” (QE), or printing vast quantities of US-dollars, in order to prevent a deflationary spiral.
How the ECB Engineered the Euro´s Recovery
The hysteria over the solvency of the Club-Med countries, - Greece, Portugal and Spain, was whipped into a frenzy, with questions being asked about the long-term viability of the Euro itself. But now, Euro-zone politicians are trying to refurbish the Euro’s stature, by adopting fiscal austerity measures to reduce their bloated budget deficits. At the same time, the ECB has begun to sterilize its debt purchases.
The Psychology of the Copper Market
Copper has been on a wild rollercoaster ride, famous for its “boom-and-bust” cycles. Gambling on copper’s next major move is always a high stakes bet. Last year, copper dealers found it profitable to focus solely on the demand side, while largely ignoring the supply side of the equation. After-all, “the market value of any commodity is only worth, what the highest bidder is willing to pay.”
Radio Interview on Global Markets - May 27, 2010
Listen to a 15-minute Interview, with Global Money Trends editor, Gary Dorsch, and the host of the Financial Sense radio show, - Jim Puplava, - discussing the outlook for the global stock markets, the Euro-zone debt crisis, and Gold.
Euro-zone Credit Crunch & Shanghai Shakeout
Few traders know much about the credit default swap (CDS) markets. They’re traded on an unregulated, over-the-counter market, and far from the public’s view. Yet nowadays, the CDS market has become a major battleground, with the fate of the Euro currency hanging in the balance. Meanwhile, the People’s Bank of China is removing a large chunk of the stimulus from the Shanghai money markets, wrecking havoc on Asian stock markets and industrial commodities.
Greek Wildfire Engulfs the Euro in Flames
Euro zone politicians underestimated the destructive power of a tiny tinderbox – the Greek bond market. "If we will not stop these wolf-packs, they will tear the weaker countries apart,” warned Finance Minister Anders Borg of Sweden. Facing a systemic seizure of the European financial system, - the ECB unleashed its nuclear option, – “Quantitative Easing,” - printing vast quantities of Euros to douse the fire.
Could a Greek Tragedy Morph into a Lehman Meltdown?, Apr 27, 2010
In an eerie sense of déjà vu, German finance minister Wolfgang Schauble pleaded with his country’s citizens on April 20th, to back a joint EU-IMF bail out for Greece worth up to €45-billion, warning that failure to act would risk another global financial meltdown.
Central Banks Stoking Market Euphoria, Apr 15, 2010
The Dow Jones Industrials penetrated the psychological 11,000-level this week, extending its historic gains to +70% above its March 2009 lows, and melting away deep-seeded skepticism over whether equities have gone “too-far, too-fast,” in what is the least-loved bull market in history.
"Dangerous Divergences" Lie Ahead. Apr 4, 2010
Greenspan is spooked by the “dangerous divergence” that is developing between a high and rising S&P-500 stock index and the simultaneous slide in the Treasury bond market, that might trigger a stock market crash of unknown magnitude
Optical Illusions, Oil Shocks, and China’s Headache, Mar 11, 2010
Buoyed by the Fed’s hallucinogenic “quantitative easing” QE-drug, the value of the Dow Industrials is artificially inflated by 2,500-points, elevated by the Fed’s "quantitative easing" scheme, and ultra-low interest rates. Two dangerous side effects however, are the emergence of a global "Oil Shock" and faster inflation in China.
Bond Vigilantes set Sights on Sovereign debt, Feb 25, 2010
Gunslingers in the world’s money markets have wrecked havoc on the sovereign bond market of Greece. Could British Gilts and US Treasuries be the next dominoes to tumble?
How the Euro Evolved into a “Carry Trade” currency, Feb 18, 2010
Unless the ECB defends its currency soon, by draining liquidity, the Euro could become the top “carry trade” currency, usurping the US-dollar for short selling strategies.
PBoC Rattles Commodities, Emerging markets, Jan 22, 2010
It was of great interest to commodity traders, on Jan 12th when the People´s Bank of China, (PBoC) one of the world’s most influential central banks, took its first meaningful step in eighteen months, to tighten its money spigots and shakeout speculators in the high flying copper and crude oil markets.
One more Dance before Midnight Strikes, Dec 16, 2009
The Resurrection of the Gold Standard, Dec 3, 2009
US$ Carry Trade Inflate Bubbles, - Nov 22, 2009
Dangerous Side Effects of Ultra-Easy Money, - October 29, 2009
G-20 Inflates Global Economy to Prosperity, Sept 10, 2009
“Bubble-Mania” in Shanghai Spreads to Global Markets, August 4, 2009
Analyzing the Australian dollar, Up, Down, and Under - July 21, 2009
The Mystery behind the Parabolic Yield Curve - June 10, 2009
“Green Shoots” Sprouting in Global markets, May 5, 2009
New Bubbles Brewing in Shanghai and Wall Street, April 14, 2008
Speculators Return to Commodities, Aussie & Canadian dollar, March 24, 2009
Central banks unleash the Nuclear Option, March 19, 2009
US-Dollar Shines in a Depression, China buys Metals, March 5th, 2008
Beware, "Quantitative Easing" is Hallucinogenic
Central Banks Open the Floodgates to fight Deflation, Dec 3, 2008
Can Central Bankers Prevent the Great Depression? Nov 17, 2008
After Shocks from the October Meltdown, Nov 6, 2008
Weapons of Financial Mass Destruction - Oct 8, 2008
"Maverick McCain" and the Ressurection of the US$, Sept 10, 2008
Is the "Commodity Super Cycle" Dead or Alive? August 20, 2008
New Buzzword for Commodities - “Demand Destruction” August 6, 2008
What’s behind the Slide in Oil and Commodities? July 23, 2008
"Stagflation" Haunts Global Stock Markets, buoys Gold, July 8, 2008
When Central Bankers Clash, Stock Markets can Crash, June 26, 2008
Is Crude Oil a Bubble Ready to Burst? May 28, 2008
G-7 Central bankers Stymied by Crude Oil Vigilantes, May 8, 2008
Big-3 Central banks fueling Commodity Inflation, April 17, 2008
Global "Oil Shock" Rattles World Stock markets, March 12, 2008
Who is Blowing Bubbles in Global Commodity markets? Feb 26, 2008
The "Commodity Super Cycle" - Ready to Rumble in 2008
Explosive Money Supply Fuels Global Inflation Dec 20, 2007
Global Stock Markets Top Out on Peak Oil By Gary Dorsch
Is Crude Oil on Course to hit $100 /barrel? Oct 17, 2007
How High can Shanghai Red-chips Fly? October 11, 2007
Beware - Bernanke Fed can Ignite Hyper Inflation! Sept 19, 2007
Can the "Bernanke Put" Lift Gold Sharply higher? Sept 5, 2007
Stock Market Gyrations and the Yen Carry Trade August 23, 2007
Plunge Protection Team Working Overtime, August 9, 2007
Deja´ vu, Spike Rally in the Japanese Yen Spooks Global markets, July 26, 2007
How High can Crude Oil Fly? July 16, 2007
Global Exodus from US$ in Motion - July 3, 2007
Dangerous Divergences in the Global Bond and Stock Markets - June 5, 2007
New Rules for Global Investing in 2007, April 10, 2007
Unwinding the Yen, Unravels Global Stock Markets March 13th, 2007
Brewing Bubbles in Shanghai, Tokyo, and London, Feb 21, 2007
What´s Behind the Crash in Crude Oil? Jan 9, 2007
Chinese Red-Chips Soar into Orbit, Dec 27, 2006
How does the US Dollar Defy the Law of Gravity? - October 24, 2006
Central Bankers Operating behind “Smoke and Mirrors” - August 8, 2006
Central Bankers Wage War on Global Inflation - June 13, 2006
Conspiracy Theories and the Global Stock Market Melt-down - May 22, 2006
The Psychology of the Canadian Petro-dollar - February 21, 2006
Global Stock Market Rallies are Optical Illusions, but Gold could Soar to $770 per ounce - January 16, 2006
Inverted Interest Rates – Distortion or Danger Ahead - January 10, 2006
The ´Commodity Super Cycle´ - How long can it last? - January 30, 2006
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