TheRealZed
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The Lunatic Fringe - Market and Trade Chat
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Everything will cost more if it cost a butt ton to deliver it... transitory? Yeah mebe... how long is your transit?
Zerohedge
ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zerowww.zerohedge.com
Including gold and silver too. Those armored trucks don't get very good mileage and most of them run on diesel.
Most tug and pilot boats run on diesel. Very few ports allow cargo ships to dock by themselves. Even if the cargo ship can dock by itself how is the harbor pilot getting to the ship? He certainly is not going to swim or row out.
Viking
Ground Beetle
I’ll just drive to the ports in my EV.
Prepare for the worst and a debt market implosion.
The UK had to step in when it hit 5%... Can we be much different? This also implies 7.5% mortgage rates or more which is about 5% up and meaning borrowers would have 50% less buying power. IE prices have a 50% pocket under them.
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Who knows? My favorite theory right now is that of Tom Luongo in that Powell wants to be Volker and crush Europe and UK. Same as that interview with danielle dimartino booth I posted earlier. Tom says she is too close to the Fed to be able to tell *why* Powell is doing what he is doing. But Tom thinks Powell is sick of being Central Bank to the World and is doing this to favor the USA over other entities.
[Maybe Tom is naive, but it's a good story.]
[In other words, he's not going to stop unless something systemic actually breaks.]
app.hedgeye.com
[Maybe Tom is naive, but it's a good story.]
[In other words, he's not going to stop unless something systemic actually breaks.]
Hedgeye Risk Management | Danielle DiMartino Booth & Keith McCullough (Hedgeye Investing Summit)
This is an exclusive "Hedgeye Investing Summit" interview between Danielle DiMartino Booth, CEO & Chief Strategist of Quill Intelligence, and Hedgeye CEO Keith
Who knows? My favorite theory right now is that of Tom Luongo in that Powell wants to be Volker and crush Europe and UK. Same as that interview with danielle dimartino booth I posted earlier. Tom says she is too close to the Fed to be able to tell *why* Powell is doing what he is doing. But Tom thinks Powell is sick of being Central Bank to the World and is doing this to favor the USA over other entities.
[Maybe Tom is naive, but it's a good story.]
[In other words, he's not going to stop unless something systemic actually breaks.]
Hedgeye Risk Management | Danielle DiMartino Booth & Keith McCullough (Hedgeye Investing Summit)
This is an exclusive "Hedgeye Investing Summit" interview between Danielle DiMartino Booth, CEO & Chief Strategist of Quill Intelligence, and Hedgeye CEO Keith
I want the thing to break. It could very well be that Powell is breaking the system on purpose. Both sides want it to break.... it's just who gets to rebuild.
TheRealZed
Retired Sailor
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Who knows? My favorite theory right now is that of Tom Luongo in that Powell wants to be Volker and crush Europe and UK. Same as that interview with danielle dimartino booth I posted earlier. Tom says she is too close to the Fed to be able to tell *why* Powell is doing what he is doing. But Tom thinks Powell is sick of being Central Bank to the World and is doing this to favor the USA over other entities.
[Maybe Tom is naive, but it's a good story.]
[In other words, he's not going to stop unless something systemic actually breaks.]
Hedgeye Risk Management | Danielle DiMartino Booth & Keith McCullough (Hedgeye Investing Summit)
This is an exclusive "Hedgeye Investing Summit" interview between Danielle DiMartino Booth, CEO & Chief Strategist of Quill Intelligence, and Hedgeye CEO Keith
The Triffin dilemma has to be resolved at some point. I don't know how that happens without America losing the reserve status, on the other hand the feds major responsibility is making sure that the government can fund itself. I'm guessing the latter takes precedence here.
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Did you hear that Powell said it's possible to have more than 1 reserve currency?
[Out loud.]
[I was shocked.]
arcadiaeconomics.com
[Out loud.]
[I was shocked.]
Powell: 'Possible To Have Multiple Reserve Currencies' - Arcadia Economics
Yes.
arcadiaeconomics.com
TheRealZed
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Yeah, I'm thinking this was a false move. I really thought I'd made it apparent in the opening post that I'm into risk management and not picking 'winners'. I guess getting out of bed is a gamble, but so is staying in bed. Anywhooo, risk management should be your first consideration, being a gambler is a losing strategy.
TheRealZed
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I was thinking about the 'transitory' inflation having a longer transit... aka lasting longer than they expect. Everything is transitory if you are Methuselah!
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stocks should be way down if they really are worried about rising rates because the 10 year yield is up big again the last two days.
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No complaint. But I had to say it.
Front page of Marketwatch. US Treasuries are in a bad spot..
www.marketwatch.com
'Fragile' Treasury market is at risk of 'large scale forced selling' or surprise that leads to breakdown, BofA says
The world's deepest and most liquid fixed-income market is "potentially one shock away from functioning challenges," said BofA strategists.
www.marketwatch.com
No other currency is worthy and no country is stupid enough to take up the mantle that is why the USD is still king.
China is a complete mess. It can’t stand alone from the US economy as hard as it tries.
The old saw proves true, the customer is always right. As long as you are going to accept his money, the customer dictates the terms.
TheRealZed
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Did you hear that Powell said it's possible to have more than 1 reserve currency?
[Out loud.]
[I was shocked.]
Powell: 'Possible To Have Multiple Reserve Currencies' - Arcadia Economics
Yes.
I had heard it sad but not by Powell!
Personally I don't think it will work, I think one will prove to be stronger than the other and that will be all she wrote.
I guess they figure the depth of America's financial system cannot challenged and that will be the strong point for the USD.
I'm thinking that if this commodities backed currency is it success then trading in that currency will develop enough debt to solve any issues.
I don't know I just can't see them sitting side-by-side and working.
It's a strange thing to hear the Fed head say.
TheRealZed
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The whole point of the brics currency idea is that it's not a national currency. It's something like the Bancorl that Keynes proposed ages ago.
If it's back by tangibles and sits outside of any countries financial system then being part of it doesn't require that you're actually in great shape.
I suspect it will be gold backed, I think they just don't want to say that at this point in the game. I think the commodities banked idea he's just a smoke screen for now.
TheRealZed
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Front page of Marketwatch. US Treasuries are in a bad spot..
'Fragile' Treasury market is at risk of 'large scale forced selling' or surprise that leads to breakdown, BofA says
The world's deepest and most liquid fixed-income market is "potentially one shock away from functioning challenges," said BofA strategists.
That's the thing with a bear market, if you figure it's going to end up at 5 1/2 percent you want it today. Nobody willingly walks into a loss.
TheRealZed
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If Diesel is unobtainium it has to matter. Prices really do have to reflect it. That's an amazing stat for a country like the US. I'm really surprised that they've let it happen. I would have thought having sufficient diesel reserve was a matter of national security.
TheRealZed
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Given Gold's price action the miners seem to be toughing it out. No jumping out of windows anymore. Maybe we just need to get to the end of October without a major market event.
TheRealZed
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Holdings wax and wane per country over time, but you can see what's reported (up through August anyway) by the Treasury Dept. here:
<raises hand> Animal spirits! </lowers hand>
TheRealZed
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He was better than GoldBugs think, what his name is applied to these days would make him turn in his grave. He advocated government spending in a down cycle BUT also government 'saving' (debt repayment, generating a surplus etc) in an up cycle. What he didn't advocate was this constant government debt expansion and spending. He saw government as a shock adsorbed to moderate both the up and down swings.
His name has been misused and abused, in his day he wasn't so far from the Austrians. He did believed that over time government action should be sterilized or balanced. Remember in those days booms often happened when a new big goldfield was opened up, that was highly inflationary over a shortish period. The gold standard was not exactly stable in economic terms.
Had he been less of an academic maybe he'd have not trusted that government would actually do the hard yards part of the deal... but yeah, it wasn't all bad.
Bancors where essentially a way of having a supra-national currency that was exchangeable for gold yet not tied to any one economy. A goldbugs wet dream no?
Bancor - Wikipedia
@Zed I hear what you say and to an extent I agree but Bancors remind me of the failed Latin Monetary Union that ultimately was sold out by one of its members (the Papal state) and eventually failed because ultimately every country has its own interests which eventually run counter to any multinational system.
TheRealZed
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It's hard to work out exactly, the US needs inflow @ a certain rate, slowing down can cause the same issue as selling. 0 isn't the balance point, the balance point is well into positive territory. If they simply stop buying that would be a major problem that would see the US monetizing debt to get by.
TheRealZed
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I guess that is the whole point of physical backing. If they maintain convertibility it is hard for the currency to 'fail'. The question is how is that managed, that might be the stumbling block.
He was better than GoldBugs think, what his name is applied to these days would make him turn in his grave. He advocated government spending in a down cycle BUT also government 'saving' (debt repayment, generating a surplus etc) in an up cycle. What he didn't advocate was this constant government debt expansion and spending. He saw government as a shock adsorbed to moderate both the up and down swings.
His name has been misused and abused, in his day he wasn't so far from the Austrians. He did believed that over time government action should be sterilized or balanced. Remember in those days booms often happened when a new big goldfield was opened up, that was highly inflationary over a shortish period. The gold standard was not exactly stable in economic terms.
Had he been less of an academic maybe he'd have not trusted that government would actually do the hard yards part of the deal... but yeah, it wasn't all bad.
Bancors where essentially a way of having a supra-national currency that was exchangeable for gold yet not tied to any one economy. A goldbugs wet dream no?
Bancor - Wikipedia
en.wikipedia.org
So... He completely failed to understand the nature of a government itself. stupid is as stupid does.
TheRealZed
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Yes... but what is called Keynesian these days is only one part of what he suggested so it isn't really Keynesian, is it?
He did have some things wrong, well in a modern context at least. He believed that inflation and stagnation could not exist together. Maybe on a gold standard but not so in a FIAT world. We also need to keep in mind that the system has changed quite a bit since he did most of his work.
I'm not a supporter of his but I do think he gets a harsh wrap for a whole bunch of BS that he never would have supported.
Face it, what we do these days is only really supported by the Johnny come lately MMT crowd and they just seem to be justifying what has happened with a 'sudo theory' that, ironically, has appeared near the death of that era. Well that is my bet anyway!
TheRealZed
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Academic's always do... they are not so good at people and the real world.
People can bugger anything up.
Stupid is harsh, he was a smart guy but like most smart guys he had things wrong. It's not like we are always right is it?
2c
FWIW.