Posts Tagged ‘inflation’

Notes From Underground: Discussing Europe With Dr. Barbara Kolm

May 10, 2022

Last week the FOMC raised rates by 50 basis points, which seemed like the most likely outcome (although interest rate markets had assigned a slight probability of 75 basis point increase). The statement was nothing if not vague about the FED‘s plans, yet the last sentence left the central bank room for flexibility: “The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.”

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Notes From Underground: A European Discussion With Professor Polleit

May 3, 2022

Yes, Wednesday is FED day and the markets are expecting a 50 basis point increase in the FED FUNDS RATE to a range of 0.75% to 1%. The most important issue will be the size of the balance sheet unwind and whether Chair Jerome Powell is good to his heightened concerns about headline inflation means a full throttle on balance sheet shrinkage, reaching the full $95 billion a month at a quick pace. So Jerome, let’s have at it and let the markets decide the impact on myriad asset classes. In 2018, this double shotgun of QT and interest rate hikes proved too much for the highly leveraged global markets. Now that the Fed’s balance sheet is twice as large let’s see how it will affect the leverage in the global system.

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Notes From Underground: Traversing the Global Macro Landscape With Danielle DiMartino Booth

March 23, 2022

On Tuesday, I sat down with Richard Bonugli and Danielle DiMartino Booth. We traversed Ukraine, Europe, the U.S. and Danielle delved deep into the her expertise of the Federal Reserve. We discussed the recent work of Zoltan Pozsar as it has had such a great impact on the current state of global financial markets. This sets the table for Richard’s next FRA Roundtable, which will feature Mr. Pozsar, who is one of the more knowledgeable financial “plumbers.” Pour your favorite WHISKEY as the financial system is explored for potential profits involving commodities, currencies, yield curves and tangentially precious metals.

Click here to listen to the podcast.

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Notes From Underground: A Quick Hit On the State of Chaos

March 6, 2022

First, our hearts go out to all suffering in the world of insanity brought on by senseless wars that diplomacy OUGHT to have been able to prevent. The world always returns to the insanity that brought us to World War I when nobody could stop the trains once set in motion. As Phil Ochs sang, “It’s always the old who lead us off to war, it’s always to fall, look at all we won with the saber and the gun, tell me is it worth it all?” But here we are and as always the world continues to focus on the minutiae of life, including the financial outcomes responding to the high-speed headlines driven by algorithmic speed machines. There is no context to any news just manufactured volatility fabricators of the latest musings of some “news” outlets’ favorite expert. But as Hyman Roth said so clearly: “Michael this is the profession we have chosen.”

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Notes From Underground: Is It George Bailey or Henry Potter?

February 16, 2022

Bank of England Governor Andrew Bailey made a ridiculous comment almost two weeks ago and I’d be remiss not to mention it. Bailey issued his own FORWARD GUIDANCE on how to slow the pace of inflation. He suggested that people refrain from seeking big pay raises. It’s astounding that a sitting member of the G-7 Finance Group has the temerity to restrain the AVERAGE WORKER while promoting QE policies that have stoked a serious rise in asset prices for those who own antique autos, stocks, precious metals, art, multiple homes and any other asset class on the planet.

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Notes From Underground: This Isn’t the Barron’s Roundtable

February 10, 2022

On Tuesday, I sat down with the Financial Repression Authority’s Richard Bonugli and Marc Faber. The last time Dr. Faber and I spoke, there were several profitable investments that evolved from our deep discussion about the global political economy. Give it a listen as we discuss the global central banks and potential profitable areas of investment. Marc has fabulous insights on the global economy and NOTHING is out of bounds. This is a man who finds great opportunities during times of chaos.

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Notes From Underground: The Soft Bias of Low Expectations

February 3, 2022

Tomorrow is the first Friday of the month so it is known on trading desks as UNEMPLOYMENT Friday — or Unenjoyment Day for some — as volatility will reign in the early part of the trading day. As we have discussed ad nauseum volatility is the predominant theme as all the world’s central banks discuss the removal of QE, as well as raising the cost of money through returning nominal rates from a steep NEGATIVE REAL YIELD to some normal zero or hopefully a POSITIVE REAL YIELD. But headline inflation reveals that all central banks have a great task ahead in an effort to reach what POWELL and others refer to as normalcy.

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Notes From Underground: A Possible Solution to the Central Bank Dilemma

November 14, 2021

It’s been. another week in which headline inflation concerns has jolted markets, particularly in the interest rate space, but not as much as many investors and traders would have expected. The yield curves in the U.S. FLATTENED as markets seem want to believe that the FED will raise rates in an effort to CURB the enthusiasm of the stickiness of recent price increases. As Peter Boockvar pointed out in his piece on Friday’s Michigan Consumer Sentiment Survey, confidence declined due to rising concerns over the “escalating inflation rate and growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation.”

Consumers noted that the time to buy a car fell to the lowest level on record dating back to 1978. Those thinking it is a good time to buy a home was the lowest rate since 1982 when mortgage rates were far different than today’s very low loan rates.

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Notes From Underground: The Odious Designs of ECB Policy

October 31, 2021

I’m posting this week’s podcast with the highly respected Peter Boockvar. This is one of the best interviews we’ve done with Richard Bonugli as we get into foreign currency, yield curves, energy policy surrounding nuclear power plants, and as usual, an in-depth discussion on precious metals.

The podcast was recorded Tuesday, prior to the interest rate decisions from the Bank of Canada, the Bank of Japan and the European Central Bank.

Click here to listen to the podcast. 

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Notes From Underground: Will It Be An Inflated Jobs Report?

September 2, 2021

After FEDERAL RESERVE Chairman Jerome Powell’s Jackson Hole speech, the jobs data may have taken on added significance. Inflation was not a concern for Powell as that is considered transitory within the bowels of the FOMC. The failure of the employment situation to enable all who lost jobs due to COVID “through no fault of their own” has regained paramount importance.

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