Posts Tagged ‘U.S. Dollar’

Notes From Underground: Central Bank Poker

January 21, 2021

This week, three G-7 central banks had meetings and all decided to CHECK and leave policy unchanged. This was widely expected as there was little reason to UPSET the incoming Biden administration with any idea of currency manipulation. However, the Bank of Canada, Bank of Japan and European Central Bank all discussed the fear of a further slowdown from an increased spread of covid-19.

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Notes From Underground: The Sun Will Come Out Tomorrow

January 19, 2021

Say goodbye to Daddy Warbucks Say hello to Uncle Joe.

On Monday we got a preview of the Biden Administration as Treasury Secretary nominee Janet Yellen appeared before the Senate Finance Committee. It was sad that her testimony was released over the weekend. There were the stock answers to the issue of the U.S. dollar, which falls under the auspices of the Treasury Department. Yellen proclaimed that the markets would set the value of the DOLLAR and that it would not be the policy of the Biden Administration to manipulate the currency to attain some illusionary trade advantage.

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Notes From Underground: Thursday In the Park With Louis Gave

January 10, 2021

I had the pleasure of sitting down with Louis Gave last week and we discussed many of the pressing issues facing the global macro world. In May 2020, Richard Bonugli provided the FRA platform as a place to discuss the global outlook with a little bit of FORESIGHT. We HIT IT OUT OF THE PARK. Hopefully, our most recent analysis will provide similar investment outcomes and maybe succeed in clarifying some important issues facing the investment community as 2021 begins.

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Notes From Underground: Where Do We Go From Here?

January 3, 2021

In 2020, the entire world endeavored to smooth out a new wrinkle in the global macro landscape as the covid pandemic spurred fears of a global depression as economies shuttered to stem the virus’s spread. The FED stepped in to ensure that the global system had access to enough dollars as corporations and individuals rushed to sell assets in an effort to meet a potential economic contraction. The U.S. central bank did its best to reduce the fear of deflation by opening dollar swap lines to more foreign central banks, as well as pushing U.S. interest rates back to the lower zero bound. The huge amount of liquidity thrust upon the financial system stopped a global selloff in its tracks.

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Notes From Underground: Never Have Been and Never Will Be

December 21, 2020

… a supporter of Treasury Secretary Steve Mnuchin. In my opinion, he’s another Wall Street hack devoid of any genuine knowledge of the global macro world in which he his sent to do battle on a daily basis. Last week’s decision to label Vietnam and Switzerland as “currency manipulators” is badly timed, badly chosen and badly misinformed. Why would you name Vietnam a currency manipulator when a large part of the Trump administration’s policy is directed toward relocating global supply chains away from China. In addition, labelling Vietnam a “currency manipulator “is an immoral and unconscionable act. Even Bob McNamara is spinning on his “rotisserie in hell.”

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Notes From Underground: Was Powell’s Press Conference Loaded for Bears?

December 18, 2020

Wednesday’s FOMC release and the Jerome Powell press conference provided the market with enough ammunition to power even higher and send the DOLLAR lower. There was NOTHING hawkish about the FED decision regardless of the conclusions drawn from the ridiculous forecast from the SUMMARY OF ECONOMIC PROJECTIONS, which have as much value as teats on a bull. The SEPs have been never met in all the years the FED has released them as “quality” forecasts. Why did the market resolve to take a DOVISH view?

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Notes From Underground: The Darkness of Foreign Exchange

December 10, 2020

There were two central bank meetings in the past two days: The Bank of Canada and the European Central Bank. The BOC stayed its current course with no change in policy. Several analysts were looking for more dovish action because of the appreciation of the Canadian dollar but the BOC was wise in noting that a “broad-based decline” in the U.S. exchange rate has contributed to a “further appreciation of the Canadian dollar.” As a result, the BOC has ZERO concerns about its currency appreciating as long as it is BROAD-BASED.

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Notes From Underground: Closing In On Critical Levels

December 3, 2020

In the past six months, NOTES FROM UNDERGROUND has always been more podcast than blog posts so it’s a very good time to review and put the markets into perspective are as we approach 2021. NOTES has been on the bearish side of the DOLLAR trade since Wolfgang Schaeuble — the purveyor of the German NEIN and infamous Schwarz NULL (black zero) — pivoted and promoted a large grant program to help the severely impacted European economies suffering from COVID and a massive debt burden. As Schaeuble suggested, giving more loans was similar to giving the debt plagued nations ROCKS, weighing them down ever more, while giving large GRANTS was similar to providing BREAD.

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Notes From Underground: Yra and Gary Talk Deflation

November 6, 2020

On Wednesday, I had a long discussion over Zoom with the eminent Gary Shilling, courtesy of FRA. There is much we agree on but as my readers are aware, my view on a coming deflationary spiral is measured as a low probability outcome of the current financial and economic situation. If deflation were to take hold it would be deemed a major failure of FEDERAL RESERVE policy aided and abetted by 535 fools on Capitol Hill. Before getting to the PODCAST, I offer up this advice on this week of major macro-economic importance (and NO, NOT THE U.S. ELECTION). There were three central bank meetings this week: The Reserve Bank of Australia; the Bank of England; and the Fed.

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Notes From Underground: Too Little Is Worse Than Too Much

October 6, 2020

Following Federal Reserve Chairman Jerome Powell’s speech Tuesday at the National Association for Business Economics, the media (financial and mainstream) ran with the idea that Powell would rather have the government err on the side of TOO MUCH STIMULUS instead of failing to provide the needed boost to an economy that’s beginning to stall after a robust third quarter.

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