Tonight I am posting the latest episode from the Financial Repression Authority (click on the blue link to listen). I do these for no remuneration as I think the information flowing out of this group creates great conversation and can generate some very profitable investment opportunities. Yes, it’s 34 minutes long but it is more LEARNATIVE than the network news. So pour a stiff whisky and listen while doing other reading. I share this with, you readers because I am honored to be a part of this great dialectical process. One of the key points in tonight’s post is the development of a narrative in which to analyze the world of Trump. It is not a partisan narrative but one I am developing as I attempt to discern the unfolding global dialogue being put forward by Team Trump.
Posts Tagged ‘Chinese Yuan’
The mid-day, market-moving announcement from FBI Director Comey resulted in the selloff of the DOLLAR, EQUITIES and RALLIES IN PRECIOUS METALS just after the market had enjoyed the better-than-expected first look at the third quarter GDP. I will try to make sense of both releases from a market stand point and in an APOLITICAL format.
Over the weekend there was a new and improved G-20 communique, which was supposed to offer reassurance that the primary economic decision makers have things under control. It is disconcerting that so much time was spent discussing the global uncertainty posed by BREXIT for the global equity markets have deemed the British vote to Leave the EU as non-event (at least for now) and maybe even a positive for the Davos elite to adjust previous policy decisions. It appears that some G-20 members look forward to dealing with the U.K. on trade issues outside an EU establishment that is reticent to foster trade agreements because of German and French elections scheduled for 2017.
As Notes From Underground has been publishing for five-and-a-half years, a recurring theme has been the ineptness of the IMF. While there are many fine economists and researchers working for the IMF, its history is laden with policies that were devastating for the nations that used its facilities as an act of financial desperation. As the global lender of last resort, the FUND demanded onerous policies of raising interest rates, devaluing currency and undergoing fiscal austerity as a prerequisite for an IMF bail out. The recipients of most IMF loans were “third world” nations that had run out of alternative creditors. The IMF was the “only game in town.” During the height of the Asian crisis of 1997-1998, many of the Asian Tigers shunned IMF advice and money and operated outside the bounds of the Bretton Woods-IMF system.
Round and round the EU goes as it searches for a way to resolve its self-made crisis. As predicted, the Germans and French leaked news to the press–via the Guardian–that a deal had been struck, which would provide the EFSF and the ECB with an equivalent of 2 TRILLION Euros for aiding and abetting the bailout and support of the European financial system. The early afternoon news story gave impetus for the equities to RALLY as well as a SELLOFF in the DOLLAR. The precious metals staged a late recovery after a very severe correction in the morning–GOLD was down almost $50 at its lows.
Yes, the ECB raised rates today and Trichet failed to listen to the wisdom offered by NOTES FROM UNDERGROUND. That means I have overestimated the wisdom of Trichet while underestimating the size of his ego. The rate rise to 1.5% was widely anticipated so the EURO was immediately sold but regained some strength after the ECB announced that it was WAVING THE MINIMUM CREDIT RATING FOR PORTUGUESE BONDS USED AS COLLATERAL FOR REPOS. As the ECB raises rates, it allows for weak collateral to be utilized thus allowing for a large liquidity infusion. This is a fine example of Dostoyevsky’s Grand Inquisitor as bread is taken from the people with one hand and returned to them with the other and the people believe it is a miracle. Europe has become a “ball of confusion.” Why raise rates when you are simultaneously lowering credit standards to prevent a sovereign default?