A Note From Notes
On December 7, 2009, NOTES FROM UNDERGROUND published its first post and we’ve shared a few thousand thoughts since then (all archived at WordPress and for those on CQG they available thanks to the great efforts of Stan Yabroff). In sifting through this treasure trove I am proud to say this has been an arduous but rewarding endeavor. The amount of work is great especially because so many of these musings have been time sensitive.
Then in the last five years, I’ve been fortunate enough to work with the Financial Repression Authority to elevate the discussion surrounding these thoughts with some of the greatest minds in the business — Felix Zulauf, Marc Faber, Jim Bianco, Peter Boockvar, Lacy Hunt, David Rosenberg, Louis Gave and so many others.
So as I scroll through the voluminous posts, podcasts and CNBC appearances, I’m in awe of how we’ve attempted to open up the world of financial markets to deep analytical exegesis of important investment ideas on a time scale from one hour to years depending upon the amount of leverage involved in the trade. As Louis Gave once said, “I am not paid to forecast for my clients but to adapt,” that sums up the endeavor of this blog. Over the past 12 years I have hoped to get my readers to adopt to the illogical exigencies of the geo-political world. The rationalists do not read NOTES FROM UNDERGROUND because they know where prices OUGHT to be.
But, where do we go from here? This is where you come in, dear readers. I’d be interested in understanding how you best consume this information. Maybe it’s a 15-minute daily chat with FRA’s Richard Bonugli and other guests. Either way, we’re going to try and monetize this wealth of information, and offer up my wisdom to large traders, sovereign wealth funds and family wealth offices and the like. It’s been so enriching interacting with many minds around the world. I am beyond grateful to experience, teach and, most importantly, learn from the likes of Dave Richards, Mike Temple, Big Man, Professor Waspi and many more.
In that vein, I am posting a podcast that was recorded about two weeks ago, a roundtable of sorts featuring Jim Bianco and Peter Boockvar. This may be one of the best ways to advance NOTES FROM UNDERGROUND.
Many Thanks,
Yra
***One last theme to think about. The strength of the DOLLAR this year — especially in the last three months — is a brewing disaster for the global financial system. The Institute of International Finance has been hypersensitive to the rabid rise in global debt, which is approaching $300 trillion. The DOLLAR’S reserve currency status is responsible for much of the debt as at least 55% is denominated in the greenback via different forms of derivatives. But a rise in the DOLLAR causes hardships for those not engaged in DOLLAR commerce except for the pricing of their debt. It is this huge mismatch that poses a potential calamity for the entire global financial system.
The DOLLAR‘s reserve role with the debt overhang means that FED Chair Jerome Powell has to be extremely careful in embarking on a tapering and rate increases while other central banks like the ECB are still aggressively pumping liquidity into the system. ECB President Christine Lagarde must STOP her dovish rhetoric and cooperate with the other G-7 finance ministers and central bank chiefs to end QE as one.
On Wednesday, rhetoric from ECB members and other European finance ministers has been more “hawkish,” and has caused the EURO to reverse recent losses and yields on euro-area sovereign debt rising higher (and taking U.S. bonds with them). If the G-7 nations would coordinate their policy decisions and the DOLLAR were to weaken, then the U.S. YIELD CURVE would probably reverse its recent FLATTENING action. Pay attention to currency levels. A critical currency outlier continues to be the Chinese yuan as it continues to rally in direct contravention to conventional wisdom: weak Chinese economy, weak currency. It is making a 40-month high Wednesday. Does this mean a further commodity rally as the CHINESE ECONOMY shifts to more domestic consumption?
Tags: central banks, Christine Lagarde, ECB, Euro, Federal Reserve, global debt, U.S. Dollar, U.S. yield curve
December 8, 2021 at 3:49 pm |
Hello Yra and fellow followers of NFTU.Here is a tweet from La Garde.She knows “humps”? .She says with great confidence that inflation will go down in 2022.What she does not say is ,that is IF she really knows and not saying now ,is if inflation does go down, it is likely it will be a bust.
December 8, 2021 at 3:50 pm |
La Garde Tweet https://twitter.com/i/status/1468244988630818827
December 8, 2021 at 4:01 pm |
Yra Thank you for another great year here, I have certainly profited far more from the board and its gurus than anything anyone thought I may have contributed.
File the following quote from this week’s BLS release under “this can’t be good”:
“Non-farm business sector labor productivity decreased 5.2 percent in the third quarter of 2021, the U.S. Bureau of Labor Statistics reported today, as output increased 1.8 percent and hours worked
increased 7.4 percent. This is the largest decline in quarterly productivity since the second quarter of 1960, when the measure decreased 6.1 percent.”
December 8, 2021 at 5:21 pm |
Yra Thank you for all that you do, and for your generous shout-out.
Your work through NOTES along with the reader’s contributions have been a refreshing and rewarding safe harbor in a world filled with nonsense and fake ‘analysis’.
December 8, 2021 at 10:03 pm |
Thank you very much Yra.
I always enjoy and profit from the clear sighted adaptations you and your cohort so generously share. It’s informative and quite frankly, refreshing.
Now, where do I find that podcast you mentioned?
Sincerely,
Leslie Philipp
December 9, 2021 at 6:31 am |
Leslie–click on the picture above /and orgo the financial repression authority web site and thank you for your kind words.
December 9, 2021 at 8:56 am |
Thankyou very much Yra. I learn so much.
Salonstudios, I find it interesting that at a time when Powell “retires” the word “transitory”, La Garde is discussing a “hump” which refers to transitory. Yra has been saying, those in high places should find the same play book. However, I personally believe that it is more easily viewed as a chess match between all the countries, they don’t only want to solve the current dilemma, they want to win also.
December 9, 2021 at 9:09 am |
Dear Yra Thank you for all the work to inform all who follow you.Click on the link toward the end of the video shows country that are in biggest debt:https://youtu.be/JK-_k6EZFMc
December 9, 2021 at 10:23 am
This op-ed in today’s WSJ shows that this farmer understands inflation better than Powell, La Garde and their ilk. Inflation is a landscape strewn with the unintended consequences of good intentions and bad policy:
https://www.wsj.com/amp/articles/inflation-isnt-transitory-on-my-farm-supply-chain-shipping-small-business-trade-fertilizer-hawley-rubio-11638980824?mod=opinion_lead_pos5
FWIW TBM
December 9, 2021 at 11:37 am |
This is the favorite part of all this work–the discourse that takes place in such a decorous and high level to seek out the most profitable path to investable gains
December 9, 2021 at 11:44 am |
Hopgrower—i read Lagarde’s speech and the reference to humps being temporary but i advise the former French Finance Minister to visit Notre Dame and seek out its bell tower denizen
December 9, 2021 at 3:01 pm
Yra I have a hunch that whatever La Garde would say to him would just roll off his back.
December 9, 2021 at 3:26 pm
What she didn’t mention is Quasimodo .He carried the hump around into his death.Hopefully France won’t have the same fate.
But is does Not look good
December 9, 2021 at 9:18 am |
Yra, thanks for all the knowledge you share with us. I was a friend of Lenny Feldman who always spoke very highly of you. All the best, Marte A
December 9, 2021 at 3:50 pm |
Lenny Was a force to be reckoned with on the floor of the CME .
A Great trader
December 10, 2021 at 12:41 pm |
Marte—you said so much in one sentence–thank you for your continued support
December 9, 2021 at 5:36 pm |
Thank you Yra for all the insights you provide. This blog has taught me so much. Thanks to everyone who contributes!
Wishing everyone a happy, healthy and prosperous New Year.
December 9, 2021 at 9:57 pm |
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December 10, 2021 at 3:33 am |
Thanks Yra. I don’t trade at all (prefer PM’s) but have been coming here for years now. Jim Sinclair many years ago spoke very highly of you…. and I have been coming here ever since. Thankyou.