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Goldhedge

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Just what exactly are they attempting to stop by raising rates? Inflation?
 
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Zed

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Just what exactly are they attempting to stop by raising rates? Inflation?

Yes... but there is an argument that raising rates when you are dealing with a supply shock driven inflation is a tad suicidal. Killing demand with high rates when it's a hot economy with demand driven inflation is one thing, killing demand when inflation is driven by tight supply is a bit loopy. The Fed is a dog chasing a school bus, they are gonna run smack up the back of it as soon as we get to the next bus stop.

DIY depression at this rate!
 

Goldhedge

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Yes... but there is an argument that raising rates when you are dealing with a supply shock driven inflation is a tad suicidal. Killing demand with high rates when it's a hot economy with demand driven inflation is one thing, killing demand when inflation is driven by tight supply is a bit loopy. The Fed is a dog chasing a school bus, they are gonna run smack up the back of it as soon as we get to the next bus stop.

DIY depression at this rate!
That's what I thought too.

Give the patient enough to kill it.
 
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Zed

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Massive and unprecedented curve inversions point to some as-yet unidentified economic and financial hurricane. Conducting a survey of global foreign currency reserves, there's already been huge destruction closing in on a trillion. And if what curves are pricing is accurate, worse to come, what does that look like when a trillion dollars destroyed is the prelude?

 

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Yes... I think I agree, this is not a Volcker moment. IMO we need the market to set rates here and the Fed to stay the !$@%#^@!!!! out of it.
Good point Zed. The Fed is trying to stop the inflation bus by letting off the gas; Volcker would have applied the brakes.

Point being the brakes would now destroy the bus. Either they gently curb inflation or nothing... The correct move is fatal.
 

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Curious how well RIOT and MARA have held up so far. Here's another WAG. I hear 14K or even these targets.



FhKEXBZVUAAfV0p.jpg
 

Goldhedge

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Yes... I think I agree, this is not a Volcker moment. IMO we need the market to set rates here and the Fed to stay the !$@%#^@!!!! out of it.
Is this even possible?

Is the FED bigger than the market, or is everyone a sheeple following the FED?
 

Goldhedge

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Massive and unprecedented curve inversions point to some as-yet unidentified economic and financial hurricane. Conducting a survey of global foreign currency reserves, there's already been huge destruction closing in on a trillion. And if what curves are pricing is accurate, worse to come, what does that look like when a trillion dollars destroyed is the prelude?


If all this money has been destroyed (erased digitally? cash burned up?) doesn't that imply less inflation - if the cause of inflation is excess money printing?

Fed Pivot Looms As Cracks Start to Show Everywhere.​

16m
 

Goldhedge

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Michael Pento: Stocks To Fall 30-60% Until A True Fed Pivot Happens​

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A year ago when today's expert appeared on this channel, he warned of an approaching bear market & economic deceleration.

Specifically, he predicted these would be caused by the simultaneous shutoff of the $trilions of government stimulus issued in the year following the global pandemic -- the largest monetary & fiscal cliffs in history.

Fast forward to today & well, his outlook was right on the money.

So what does he see in store as we head into next year? To find out, we're fortunate to welcome macro analyst & money manager Michael Pento back to the program.

 

Viking

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Michael Pento: Stocks To Fall 30-60% Until A True Fed Pivot Happens​

40m
A year ago when today's expert appeared on this channel, he warned of an approaching bear market & economic deceleration.

Specifically, he predicted these would be caused by the simultaneous shutoff of the $trilions of government stimulus issued in the year following the global pandemic -- the largest monetary & fiscal cliffs in history.

Fast forward to today & well, his outlook was right on the money.

So what does he see in store as we head into next year? To find out, we're fortunate to welcome macro analyst & money manager Michael Pento back to the program.


Part 2 tomorrow?
 

pmbug

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Federal Reserve officials welcomed Thursday's news showing that inflation rose less than expected last month, and they noted that interest rate increases could slow ahead.

But they also cautioned against getting too excited by the data, saying that prices are still far too high.

"One month of data does not a victory make, and I think it's really important to be thoughtful that this is just one piece of positive information, but we're looking at a whole set of information," San Francisco Fed President Mary Daly said during a question-and-answer session with the European Economics and Financial Centre.
...


This morning was just an example of irrational exuberance you see. Fed talking tough and going to continue bringing the hammer until inflation is beaten into submission.
 

pmbug

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After 12 years in the gold swap business, the Bank for International Settlements seems to have just about gotten out.

The bank's October statement of account, just published --


-- shows that the bank's gold swaps, which totaled 501 tonnes in January and have been falling sharply throughout the year, have crashed to only 7 tonnes as of October.
...
As is clear from Table B below, the level of swaps had been significantly higher in the first half of the year and the October total is easily the lowest in more than four years.

Table A below highlights the level of gold swaps reported in the annual reports of the BIS all the way back to 2010, when the bank's use of gold swaps appears to have begun. At only one year-end since then, in March 2016, has the swap level been lower than it is as of October 2022.

The BIS has been an active trader of significant volumes of gold swaps on a regular basis, and the recent data indicates that there is a distinct possibility that its trading in gold swaps soon will end entirely.

The BIS half-year report to September 30, 2022, has also just been published and while it offers no direct comment on the use of gold swaps, its disclosures include confirmation that the BIS still holds 102 tonnes of its own gold and that very little of its activities in derivatives are with central banks.

This latter disclosure offers support for the assumption that the bank's gold swaps, being derivatives, are with bullion banks rather than central banks.

The reduction in the BIS' gold swaps could be due to the application of “Basel III” regulations to bullion banks. As is usually the case with the BIS, it seems unlikely that more information about the swaps will be released.
...

More:


Less liquidity for bullion banks then? What say you Credit Suisse?
 

Zed

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This morning was just an example of irrational exuberance you see. Fed talking tough and going to continue bringing the hammer until inflation is beaten into submission.

The only issue is that it would have come down to the extent that it has anyway and it will be more problematic in certain areas because it is supply driven and in essentials. Their only achievement is to kill the consumer... maybe the market would have gone here anyway but I doubt it.

People... feel free to talk me out of this, but I think that the Fed is paving a quicker path to deep recession. Hey look, that might be the quickest way through this. If we end up cleansing debt at a much faster rate it will be shorter but more intense pain.
 

pmbug

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... it will be shorter but more intense pain.
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jelly

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The one thing I'm trying to figure out right now is how high does this rally in gold/miners go before we get our first pullback? GDX 30?
 
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