Notes From Underground: Happy Memorial Day, A New Podcast from FRA

I am posting a new FRA podcast that was recorded May 24 with Richard Bonugli. We cover many important topics, including the rise of Bitcoin as an investable product. As I have said often, I need to learn more about crypto-currencies and their impact on the global financial system. Unlike Ben Bernanke, I understand GOLD but am seeking to understand BITCOINS. I am striving to learn the workings of the block chain mechanism and relying on the wisdom of one of favorite readers and supporters American Limey.

***Asher Edelman. There has been much written about the views of Edelman and the Plunge Protection Team. This supposed covert group works to keep a bid to the U.S. equity markets during times of great duress. During the seven-plus years I have been writing NOTES the issue of the Plunge Protection Team has arisen on several occasions and I am skeptical that such a long-term conspiracy could exist in the leak-prone hallways of Washington D.C. In a world where central banks add so much liquidity on a monthly basis and the fact that the ECB, SNB, BOJ and FED can do their liquidity adds whenever they deem necessary, one particular group is not of necessity.

Also, it seems relevant that the RISK-PARITY funds add to the market calming actions for it is aligned with the needs of the central banks. Also, option premium sellers in search of higher yield have an incentive to join the protectors of acting against a high volatility plunge. I think Professor Edelman is one of the better minds in the financial community I am not in his conspiracy-oriented camp.

***The G-7 meeting in Sicily had its moments of discord. President Trump raised the ire of his fellow leaders as he expressed reticence in supporting global warming sentiments in the communiques, as well as issues about free trade. Trump also challenged German Chancellor Merkel about the continued imbalances in global trade that continue to favor Germany in a very substantive manner. Merkel voiced her displeasure but I think Frau Merkel doth protest too much for she upstaged Trump’s trip to the G-7 and Brussels by inviting President Obama to Berlin on Thursday in what the Financial Times termed a “love fest.” Whatever the reasons for the friction between Merkel and Trump, the citation of the trade imbalances means that the issue continues to simmer. The U.S. President noted the huge profits of the German automakers who have benefited from the weak euro. I note this for our concern.

Since round one of the French elections the EURO/YEN cross has rallied 8% so the Europeans can certainly say that the recent appreciation of the EURO against the DOLLAR AND YEN should alleviate some of the Trump administration’s concerns. But if the U.S. Treasury and Commerce Secretaries continue to express concerns over trade imbalances, then we must watch the YEN because it will be the next target of the tweeter-in-chief. Do your technical work on the YEN to look at potential signs of an incipient YEN rally. It’s a high risk trade because of YEN fundamentals and rising U.S. interest rates, but trade concerns in Twitterdonia can trump other fundamentals. My charts show the 200-day moving averages in the YEN futures at 0.9153 while the dollar/yen cash level is 110.16. Just adding perspective to the recent discussions out of the G-7 meeting.

 

 

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7 Responses to “Notes From Underground: Happy Memorial Day, A New Podcast from FRA”

  1. Richard H Papp Says:

    On Thursday, June 1st, it will be 2 months since the Dow Industrials and Transportation Av. made new highs. For those Students interested in Dow Theory I offer 2 references which are available at AMZN
    1. The Stock Market Barometer by William P Hamilton
    2. The Story of the Averages by Robert Rhea
    I would like to take a moment to praise Yra Harris
    Thanks for the time yu freely give to us

  2. silverbug2155 Says:

    So you buy a Benz for $80,000 with Bitcoin one day. The next day the price of Bitcoin drops $125. I think that’s all you need to know about Bitcoin coming from a business standpoint.

  3. The Bigman Says:

    Hey Yra What happened with the Chicago PMI today? What was the reaction on the floor and what is the trader take on what is to me inexplicable. I have learned over the years that when something is inexplicable ultimately the reason is either money sex or power. I suspect here it is the first.

    • Yra Says:

      Bigman–this has happened many times before over the course of my trading years–but I do find comradeship with your analysis based on the three pillars of the corruption of human behavior

  4. Chicken Says:

    It seems to me, assuming crypto currencies are simply another means of money laundering, elites will be all into it.

    Given the world is now runs on fantasy, fumes and fairy dust as opposed to sweat equity, why not?

  5. the american limey Says:

    so why are all the major global banks pumping billions into blockchain?

    I would STRONGLY recommend you consider the fact that FIAT bitcoin WILL be issued by governments in lieu of cash and therefore smart contracts WILL be a reality. Cashless society means more control, tax season a breeze for governments…

    You will be able to readily check the providence of the bitcoin in a blockchain to ensure that ALL bitcoin used to pay you is from a FIAT source.

    WHEN Amazon use blockchain you will pay significantly LESS for items as they don’t have to pay AXP/MA/V for their services so no percentage to them ( I would suggest considering buying put verticals in your IRAs)

    YOU NEED TO RETHINK THIS TOPIC!!!!

    • Yra Says:

      American Limey—you seem to be in the vanguard of thinkers which is a difficult task for a Limey but hence the appropriate modifier.This is a very important post and should be on everybody’s list of reading in an effort to comprehend the power of central authorities to control all financial transactions.Electronic crash has been the battle cry of Larry Summers and others as they seek to find ways to counter-act the hoarding of cash in the times of zero and negative interest rates.The low velocity of money is wreaking havoc on the central banks models—time to invoke financial repression in order to uphold the validity of the models

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