Archive for the ‘Currency’ Category
August 23, 2020
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.
(more…)
Tags:Euro, European Union, Gold, Japanese yen, U.S. Dollar
Posted in Currency, Podcast | 8 Comments »
June 6, 2020
The MISS by the economic analysts of Friday’s unemployment data has rendered all data as tertiary relative to the policy that has been enacted to counteract the malicious effects of the Covid-19 shutdown. Global stock markets have rallied as if normalization has occurred and UNEMPLOYMENT has returned to its historic lows of 3.5%.
(more…)
Tags:central bank stimulus, Christine Lagarde, ECB, Euro, Federal Reserve, fiscal policy, Jerome Powell, U.S. Dollar
Posted in Currency, ECB, Fed | 10 Comments »
June 2, 2020
On Monday night, the Reserve Bank of Australia issued its policy decision and as expected, there was no change in overnight rates at 0.25%. More importantly, the RBA is targeting three-year Aussie government bonds at 0.25%, keeping the yield curve flat or inverted out to that point.
(more…)
Tags:Australian dollar, Bank of Canada, Canadian Dollar, European Central Bank, Reserve Bank of Australia
Posted in BOC, Currency, ECB, RBA | 11 Comments »
May 17, 2020
(NOTE: The following post is not political in any sense, but just a criticism of a major ill-conceived POLICY.)
This is a story of two pivots.
The first is Federal Reserve Chairman Jerome Powell in January 2019. The second is President Donald Trump in May 2020.
Powell’s pivot away from interest rate increases and balance sheet shrinking created a significant rally in equity and asset prices. Trump’s pivot on the DOLLAR will have disastrous results that are manifested in the GLOBAL DEFLATION that central banks have been trying to prevent. What is the reasoning behind the President’s recent shift away from a weak dollar to promoting the positive outcomes of a strong currency?
(more…)
Tags:deflation, Federal Reserve, Gold, Jerome Powell, U.S. Dollar
Posted in Currency, Fed, United States | 17 Comments »
May 4, 2020
Question: Why does the Swiss National Bank become an important topic for discussion?
Answer: Since Mario Draghi’s “whatever it takes” and “no taboos” comments in 2012 about saving the euro. The SNB has been in a defensive position of trying to prevent a dramatic appreciation of the FRANC as the SWISS acts as a haven for Europeans. The geographic location provides for what economists refer to as home basis.
(more…)
Tags:SNB, Swiss Franc, U.S. Dollar, U.S. Treasury Steven Mnuchin
Posted in Currency, SNB, United States | 24 Comments »
April 28, 2020
On Monday, the Bank of Japan promised to buy all the bonds (or as much as necessary). On Wednesday, the FEDERAL RESERVE will offer little as they will be following Dr. Fauci’s lead and proclaim to know little about the end of Covid-19, as Chairman Jerome Powell should. But the key will be the market’s search for a timeline in response to a turn in the economy. Wall Street is looking for forward guidance as to when the Powell Fed will PIVOT from the massive liquidity injections. Will it be an inflation target, employment condition or a return to positive GDP? Powell will use DON’T KNOW and will be patient in removing stimulus as wanting to see any secondary effects.
(more…)
Tags:Federal Reserve, Jerome Powell, U.S. Dollar
Posted in Currency, Fed, United States | 31 Comments »
April 27, 2020
First off, I’d like to thank everyone who contributed to the Santa Mike/Covid relief at St. Vincent de Paul, a long-standing charity that gives every penny to those seeking help for hunger, clothing and medical assistance. Thanks to you, we have contributed more than $30,000 and for that Santa Mike is very grateful. As Mike keeps telling me, “Do you know how much $30,000 dollars of food is when bought in BULK?” This truly makes a difference for those struggling to get by in these extremely difficult times. SO THANK YOU ALL SO MUCH. Every donation matters and there are multiples because Peter at St. Vincent de Paul has procured some donors who are doing matches. That only makes NOTES FROM UNDERGROUND worth doing in even bigger ways.
(more…)
Tags:Federal Reserve, Gold, inflation/deflation, Jerome Powell, U.S. Dollar
Posted in Currency, Fed, United States | 11 Comments »
April 23, 2020
It seems this would be a good headline for the New York tabloids if any mainstream U.S. media outlets actually paid attention to what took place in Europe. Again, EU leaders failed to agree on a large fiscal stimulus backed by a common funding mechanism, or as George Soros and others recommended, a perpetual EUROBOND of at least a TRILLION EUROS or more. The Germans and their running dogs fail to acknowledge that the collapse of the European financial system if the Italians choose the “nuclear option” and say CIAO to the EURO the cost will far exceed any amount being discussed.
(more…)
Tags:Christine Lagarde, Euro, Eurobond, U.S. Dollar, Yanis Varoufakis
Posted in Currency, ECB, Europe | 46 Comments »
April 21, 2020
ATTENTION: What you are about to read IS NOT A POLITICAL STATEMENT for I don’t care about your politics and you shouldn’t even know mine. The OVAL OFFICE provides the U.S. president a pulpit in which to amplify his/her voice in a an effort to tip the policy debates in their favor. But one a policy is ill advised from a trade/financial perspective and we will shout it from NOTES FROM UNDERGROUND.
(more…)
Tags:China, Christine Lagarde, deflationary spiral, dollar-denominated debt, ECB, Euro, Fed, U.S. Dollar
Posted in Currency, ECB, United States | 29 Comments »
April 13, 2020
On Monday, Treasury Secretary Mnuchin said the G-7 will be holding a video conference Tuesday, which will include all the central bankers. What is on the agenda? It has not been announced so we are left to GUESSING. The Swap LINES have been opened, massive asset purchase programs are in place, new facilities have been created and fiscal stimulus is raining down in all the old familiar places. The OIL agreement is in place and the FED has even embarked on a program of exchanging CASH for high yield bond ETFs in an effort to prevent a continued negative feedback loop in corporate debt markets. What is there for the G-7 to discuss?
(more…)
Tags:Euro, Eurobond, European Union, Fed, G-7, Germany, U.S. Dollar
Posted in Currency, ECB, Europe, G-7, Germany | 20 Comments »