Notes From Underground: A Long, Long Time Ago

We are back. This is the first blog post after a 10-week break. It has been a nice hiatus from writing as we took some time to reflect and respect the sanctity of motherhood.

I’m linking to an FRA PODCAST hosted by Richard Bonugli taped on Thursday featuring Barry Ritholtz, David Rosenberg and myself. This will be a solid starting point for NOTES FROM UNDERGROUND as it picks up where we left off on June 12:  LONG EUROS, LONG GOLD and looking for some vigor in the commodity markets.

Many of the things we discussed have been proven, the most significant being the impact from the Wolfgang Schaeuble PIVOT on the issue of harmonized European debt via GRANTS to the European economies most impacted by by COVID-19. The beginning of the rally in the EURO coincided with that May 24 policy volte-face by the head of the Bundestag.

The GOLD rallied with the drop in the DOLLAR but while the metal rally has been robust the slide in the U.S. currency has been rather subdued, unless you measure from the HIGH made in late March. That provides sensational headlines but little authentic substance. As I discuss in the FRA podcast, I’m still anticipating YEN strength for on a REAL YIELD basis it offers the best potential return of the market market currencies.

Enjoy the podcast and awaiting the replies in an effort to generate the typical high quality blog discourse.

Click here to listen to the podcast.

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8 Responses to “Notes From Underground: A Long, Long Time Ago”

  1. Bob Zimmerman Says:

    Welcome back Yra!

  2. Mark Garber Says:

    So good to know 2+2 still=5. I missed you.

  3. John V. Says:

    Welcome Back Yra!

  4. ShockedToFindGambling Says:

    Yra, listened to your podcast…..have to disagree on one point.

    IMO, the main reason deflation is bullish Gold (now) is that a deflationary spiral will make a lot of debt (bonds) default and hit the stock market, as well.

    So where do you protect your money?

    Short Treasuries……ok, but you’ll get a negative real rate along with huge money printing and declining credit quality…….Fitch put Treasuries on negative credit watch recently..

    So as a store of value, Gold and maybe Silver look good.

    • yraharris Says:

      Shocked–hope you are well—-I don’t disagree with you but that is the fear of deflation issue I have presented for years—don’t see how we differ????

      • ShockedToFindGambling Says:

        Yra- trust you are well, too.

        I thought In the podcast, you said that Gold rallied on deflation, because of what people believe the Central banks will do (ease).

        I’m saying Gold rallies on deflation, based on the credit risk that deflation injects into financial assets.

        Easing by Central banks should decrease credit risk, at least in the short term.

        Maybe I didn’t hear you correctly?

      • yraharris Says:

        Shocked –I view that as the corollary driving the entire edifice —in a debt based global economy Deflation is a non-starter

      • ShockedToFindGambling Says:

        Yra…..that makes sense.

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