Below is the video of Richard Nixon closing the gold window exactly 43 years ago today. Hat tip to Raja Korman
It is about time I updated you on how the ten surprises for 2014 are faring. I actually have 14 but I only get credit on the first ten. The second ten are a bonus round. I am defining my surprises as events to which investors assign 1-in-3 odds of happening but which I believe have a more than 50 […]
US data have been better
European periphery market access continues to improve
Dollar weakness may be China-related
Gold continues to get safe haven bid
China’s slowing more likely to be abrupt
Ukraine has become a military issue; contagion will increase
A full-blown emerging markets crisis is now likely
Brazil goes into a recession.
Spanish GDP growth rebounds and outstrips German GDP growth.
Gold rebounds to beyond $1600 an ounce.
US GDP growth in Q2 and Q3 is below 2%.
10-year US Treasury yields fall below 2.25%.
Abenomics ‘fails’ as Japanese GDP growth slips below 0.5%.
While the emerging markets are getting a bit of a reprieve today, it bears noting that the move to so-called safe haven assets and currencies has begun. This suggests to me that George Magnus’ warning about this emerging markets crisis must be heeded. I believe a key component to the selloff’s ending will be better economic data out of China as the interest rate hikes taken in several EM countries have not had a beneficial effect. Bonds will continue to rally until the EM crisis has been decisively dealt with. More thoughts below.
China’s plan seems to be to acquire a total of 6,000 tonnes of gold to put its holdings on a par with developed countries and to elevate the international appeal of the renminbi. Meanwhile in the futures market, the basic problem is that there are many more transactions that could put a claim on gold than there is gold registered for delivery in the COMEX warehouses. There are 107 times more open-interest positions than there is registered gold.
The chart on gold is not looking very good. And it seems that retail investors have lost interest in the precious metal. Is this a correction within the longer-term gold bull market or is it a new secular bear market for gold? I have some thoughts below?
With Spain posting its first gains in GDP in over two years, every media outlet I have seen is trumpeting this as the end of the eurozone recession. I called it early, yes. However, one quarter’s GDP growth does not make recovery. Let’s look at how Europe’s periphery is actually doing.
A reader recently asked me what I thought about the effect the government shutdown would have on asset markets. Obviously, I have no crystal ball but here are some thoughts.
Barclays Capital had a sobering update on India today. Apparently June saw the largest outflows on record from India bonds and equities portfolios. As a result, declines in India’s foreign reserves are becoming material.
Gold is breaking down in a big way right now. We are well into bear market territory here. Marc Faber thinks it could fall to $1300… before rebounding. A number of noted goldbugs are talking about a Fed conspiracy. So what is going on here? Personally, I like the way Pawel Morski puts it. Gold – unlike bank deposits, equity […]
“With the current policy, [European leaders] will need force to keep it going against the interests of the people. You do not need to be a eurosceptic to conclude that such a monetary union is also deeply immoral.” – Wolfgang Manchau, Eurozone Break-Up Edges Even Closer, Financial Times, March 25, 2013
The People are growing angry. The People will become very, very angry.