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…buying from central banks in the first five months of this year is 73% higher than a year earlier, with Turkey and Kazakhstan joining China and Russia as the four biggest buyers…
Completely agree with Orsley and his take on why the Fed HAS to cut. It’s all about the debt.
Gov’t spending in combination with rising rates is a killer for gov’t debt and expenditures.
Rate cut has nothing to do with a weakening economy, Government spending keeps a big part of the economy chugging ahead. That includes companies like mine that do work for the Dept. of Energy and Dept. of Defense.
Rates above zero are unsustainable for US gov’t debt.
We’ve seen this farce before, as Bloomberg details, when Lehman went bust, the mother of four was a portfolio manager at its investment arm, but before that, in May 2007, Gomez-Bravo became cautious on U.S. risk and issued warnings on corporate health– which bear echoes with the intense hunt for yield today.
This is the main point you should chew on this weekend; you may disagree with my data deterioration theme which gives the Fed reasons to cut, but do not miss this important point why the Fed will cut:
Rising deficits which causes increase treasury supply at a time when foreigners are losing their appetite to fund the US govt (as noted above in the bond auction) means the Fed needs to talk dovish/cut rates/provide accommodation/inject liquidity in order to keep yields from rising. We saw what happens when front end yields like 1y1y rise above 3% as it did in Q3 2018; the system breaks.
As I said in Tuesday’s note, we are seeing this issue play out in the FF/IOER spread whose widening is purely on the back of too much government debt sitting on bank balance sheets. The Fed is struggling to control front end rates and you cannot have rates rising or this whole economic cycle and market will fall apart.
The Fed has to ease, long-term economic trends show data deterioration, but there appears to be a bit of inflation creeping into the pipeline, i.e. stagflation. That all means steeper curves and now higher gold prices.
I think we’ll all sleep a little easier this weekend, as at least u have to back a truck up, or kick the door in to get our stash…instead of merely employing some 16 yr old, whose lack of personal hygiene triggers smoke alarms, fire alarms and peels paint….
so we’re allowed a few pips up…notice NEM is well under the scum cosh, pulling Hui back.
The short possy in NEM must be 100 of times the float…meanwhile the regulators are passed out from another epic Friday lunch, courtesy of Jamie and the Boys.
Sort of drifting lower towards the close, nothing unusual from any other day at this point.
Still given the recent strength of the dollar, I think we’re doing pretty well at least in gold.
Shares and silver have a long way to go. If some folks make the right call and the bull is on, silver and the shares will make them a lot of money. JMHO
The EVERYTHING BUBBLE is still alive and well after 10 yrs…and I guess the runt of the litter, gold, is going. to be dragged up. with it…or so the theory goes…N’yuk! N’yuk!
Yep, I see that the rates on the Ten Year have come back in and now are sitting at 2.11%, also see the USD is giving up some ground and pm’s are actually acting accordingly.
PM’s are definitely not screaming to the upside, but the HUI is back above 200 which is nice to see.
Gold is actually starting to outperform the dollar. Imagine what might happen if the dollar really fell?
The liars on the 3 biz channels. never mention anything about RSIs-COTs-too bullish sentiment…they talk. as if it were all quite normal and debt and all the macro problems didnt exist…
But gold goes from 1300. to 1411 [just now]. and everybody’s shi**ing their pants…
no need complaining about it…it. is. what it is…All that. said, one can still extract his pound of flesh from this rigged. system if one’s eyes are open…
going nowhere are not valid…gold is under total control…the only nagging. question that the “there is. no manipulation” contingent can still ask is why is gold allowed to hold its. gains. and still be over 1400?…I tell ya it’s a conundrum wrapped up in a mystery…t’would be nice. to. see. the bulls. carry. the. day…
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