This is actually potentially beneficial for USD (in the very short-term) and future gold mining fundamental trends alike. It is also a potentially good thing for a future 'inflation trade'…
Well yes, we've been saying the word "inflation" a lot lately. Especially as part of the term "inflation trade". Post-Jobs "What does it mean? Well for one thing, the Fed…
After an interaction with an NFTRH subscriber (the ones with whom I have corresponded are so smart it can be intimidating sometimes) who debates the view of a pervasively inflationary…
[edit] Please see a new post with more perspective on a would-be 'inflation trade' and its limitations. The following excerpt is the opening segment from this week's edition of Notes…
I don't write the title because the precious metals took off today on the bad jobs report. Far from it. That is what gold is supposed to do under such…
Last night's post on the US stock market ended as follows: "As far as the Fed and its puny rate hikes are concerned, that is irrelevant. This market is flipping…
This is the opening segment from the May 15 edition of Notes From the Rabbit Hole, NFTRH 395. I am releasing it for public viewing because it seems, the title's…
Everybody with eyes to see prices too far above certain moving averages knew that the gold stocks were going to pullback. But as this year has shown so far, a…
I am not saying this is the top in the silver-gold ratio (SLV-GLD), but I am saying that if this is the top (for this phase) then commodities and the…
On March 4 we reviewed the technical reasons why the gold sector was launching as opposed to blowing off. This, after articles began appearing calling the rise to that point…
Very simply, the weekly moving average that contained silver through its bear market has been broken to the upside. That is another booster of our assertion from earlier in the…
The market, despite weakening corporate profits and several other headwinds, has decided it liked what it heard from the Inflator in Chief yesterday as it has scored the game Janet Yellen 2, Hawks in Drag 1 and US dollar 0. Is it a final score? I am not sure how our hawkish transvestites can be taken seriously now.
But with a market running on the black boxes of a million quants, large and small, who knows what will happen the next time some clown decides to eat a microphone and dispense dissonance into a situation that Yellen seems very clear on; as my late friend Jonathan Auerbach once famously said (it was famous to me anyway) as we prepared for the post-2008 inflation phase, “it’s inflation all the way baby!”
Ever since beginning the ‘Macrosom‘ theme in July (and updating it here), NFTRH has been managing macro changes that would positively affect the gold sector, and quite possibly have a negative effect on broad stock markets. Early on in the precious metals bear market we noted they were “in the mirror” and opposite the stock market, which on the post-2011 cycle has been the beneficiary of the Fed’s inflation, instilling confidence in their policies by conventional market participants (after all, the right assets were going up on this cycle). In August, it appeared that the first real thrust in the direction of our macro theme kicked in as the stock market cracked.
The mechanism of this confidence racket, which allowed the promotion of inflation right through QE 3, has been a global deflationary force muting inflation signals and providing the US with a Goldilocks benefit as the US dollar strengthened. To this day the economy continues to ‘service itself’. Manufacturing and exports weakened under the regime of the strong USD, but those strong dollars bought a lot of services (which make up the vast majority of the economy) and consumer-related commodities.
So FOMC rolls over on Uncle Buck, secure in the knowledge that it is playing with the house’s money for now. USD could drop a long way before anyone would get overly concerned about it. So in standing down, they have managed to play their own game of global Whack-a-Mole with the currency while continuing to have credibility (waning though it is) vs. their counterparts.
It will be interesting now to see if inflation signals start to percolate. I have remained cautious on the ‘inflation trade’, taking it as a bounce and little more. But if these clowns keep it up we are going to have a genuine inflation effects bonanza on our hands down the road. Here are a couple of things to watch for signals.
Commodities vs. the stock market
TIP vs. TLT…