NFTRH 388 Out Now
NFTRH 388 was sent to subscribers earlier today. A sensible plan seems to be coming into place about when to expect a more sustainable 'inflation trade' with the USD in…
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March 27, 2016
Macro Changes and Future Inflation Problems
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.
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March 25, 2016
The Clown Show Has Come and Gone
The opening segment from this week’s edition of Notes From the Rabbit Hole has a little fun with the post-FOMC market situation. Unfortunately, there is all too much reality in this clowning around. From NFTRH 387:
Our main theme has been that the ironclad post-2011 confidence in the Federal Reserve among conventional market participants would slowly but surely start to fade because macro parlor tricks, so vigorously employed by the Bernanke Fed, were only tricks or in some cases (Operation Twist) borderline magic, after all.
At biiwii.com (still unsure if or in what capacity the site may reappear) we used to have fun with clown car videos, as the various Fed members piled out honking horns, doing somersaults and shouting incomprehensible phrases and announcements.
Like Rosco’s clown car above, that is all fading away now. The pretense that the Fed is the steward of a sound financial system and currency has been stripped away. We are no longer anticipating a waning of confidence. In rolling over last week and playing dead, the Fed announced for all the world to see that it is no more secure or respectable than the clown known as ‘the Draghi’, Kuroda the Klown or the troupes in Canada, Australia, England and China’s Central Planning.
The US Fed, through no good work of its own was the beneficiary of a Goldilocks environment in which global economic pressures resulted in capital flight into the US.
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March 20, 2016
NFTRH 387 Out Now
No time for a promo today. A good report, and a lot of editorial commenting to boot (incl. the coolest old clown car you'll ever see!). Subscribe to NFTRH Premium…
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March 20, 2016
‘Inflation Trade’ Watch
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…
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March 16, 2016
Post-FOMC; Uup is Down
Not only was there not a policy surprise – you know, in the face of recent commodity strength and those embedded services costs throughout the economy – but the Fed did not even talk tough, which I thought they might do. Maybe Yellen will wobble and speak out of both sides of her mouth at the press conference.
Here is the USD ETF flopping on the non-event.
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March 16, 2016
Silver-Gold Ratio a Party Pooper
Look folks, I realize that the last month has been fun for everybody with stocks and commodities bottoming and joining the bounce party. Reproducing the Multi-asset chart from NFTRH 386 once again, we see that gold led the whole thing by a couple of months and as of this morning’s pre-market post was pretty much still in line. Well, a $15 shave today and it’s looking more suspect.
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March 14, 2016
NFTRH 386 Out Now
#386 slims down to a focused 22 pages from #385's bulbous 49 pages. There is no need for more volume because all plans are intact, markets are within existing parameters…
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March 13, 2016
NFTRH 385 Out Now
A whopping 49 pages and not nearly as difficult to digest as that sounds. Lots of charts and graphics populate what I think is a very cohesive report managing multiple…
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March 6, 2016
Growth or Inflation?
The Federal Reserve states that its goal is to promote employment and economic growth while regulating inflation. As if it is as simple as pulling levers, tweaking a few knobs…
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February 29, 2016
‘Inflation Trade’ Ready?
Here is a look at today's economic data releases. This follows on to yesterday's big bump in Durable Goods (+4.9% correcting a previous -4.6%). The market is cheering the 1%…
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February 26, 2016
Still no ‘Inflation Trade’
Silver vs. Gold and Tip vs. TLT say "no inflation trade yet". Subscribe to NFTRH Premium for your 25-35 page weekly report, interim updates and NFTRH+ chart and trade ideas…
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February 4, 2016
NFTRH+; TLT Revisited, TIP Reviewed
With reference to Michael Ashton's post at Biiwii... No Strategic Reason to Own Nominal Bonds Now Mike Ashton is also known as the "inflation guy" and for good reason, his…
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January 27, 2016
Consumer Prices: A Sticky Situation
We have noted anecdotally that there is a creeping inflation in the system. It does not show up in commodities, which are in a post-bubble (ah, the good old 'China…
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December 16, 2015