On Politics
A Plan for Everything!
The run-up to the presidential primaries offers a funhouse reflection of American life. Presidential hopefuls, hacks, and has-beens turn to focus groups to discover what they think the American electorate wants. Then they distill it down to hollow bumper stickers. After that, they pump their fists and reflect it back with mindless repetition.
A plea for clemency from Mr. 1/1024th crow. [PT]
May Gone in June…
Yes, now that June is here, it is indeed the end of May. Theresa May, to be precise, the henceforth former British Prime Minister. After delivering her unparalleled masterclass in “how to completely botch Brexit”, British cartoonists are giving her a well-deserved send-off, which we are documenting below.
But first, in case you don’t know anything about Ms. May’s heroic “Brexit”-related efforts, here is an explanation of how she tried to finagle the best possible deal out of the Juncker Empire (instead of just waving good-bye and leaving). A visit at a Burger Kind is used to great effect to illustrate the situation:
Theresa May’s “Brexit” in a nutshell, by Alistair Williams
The Ugly End of Globalization
Sometime in the fall of 2018 a lowly gofer at the New York Stock Exchange was sweating bullets. He had made an honest mistake. One that could forever tag him a buffoon.
Art Cashin the living hat-stand, going through a succession of DJIA milestone hats. He promised was going to crack a smile for the Dow 27,000 hat photo, alas, it was not to be. [PT]
A Jolly Little War
The dawn of war is a time of simple clarity and purpose. Good guys vs. bad guys. Cowboys vs. Indians. Confederates vs. Yankees. Coppers vs. robbers. It’s a time when lines are drawn, songs are sung, and drums are beaten with gaiety and confidence.
A jolly little trade war – easy to win, according to the CiC [PT]
Fake Work
Clarity. Simplicity. Elegance. These fundamentals are all in short supply. But are they in high demand? As far as we can tell, hardly a soul among us gives much of a rip about any of them. Instead, nearly everyone wants things to be more muddled, more complicated, and more crude with each passing day. That’s where the high demand is.
One can always meet the perils of overweening bureaucracy with pretend happiness… [PT]
Why a Chernobyl-like Financial Disaster is Inescapable
In the early morning hours of April 26, 1986 – roughly 33 years ago – things went horribly wrong in the town of Pripyat, in northern Soviet Ukraine. Reactor No. 4 at the V. I. Lenin Nuclear Power Plant, also known as the Chernobyl Nuclear Power Plant, was overwhelmed by an uncontrolled reaction. There was no stopping it.
Chernobyl after the explosion (left) and today (right), encased in a steel sarcophagus. [PT]
Threats of Nuclear War
On February 26, 2019, the Indian Air Force, for the first time since 1971, conducted a raid inside Pakistan, and allegedly hit a terrorist training camp, killing more than 250 terrorists. Pakistan showed photographs of damage to a tree or two. According to Pakistani officials, no one died and no infrastructure was damaged.
Mirage 2000 warplane of the Indian Air Force in medias res. [PT]
Photo credit: hindustantimes.com
Money Supply Growth Continues to Falter
Ostensibly the stock market has rallied because the Fed promised to maintain an easy monetary policy. To be sure, interest rate hikes have been put on hold for the time being and the balance sheet contraction (a.k.a.“quantitative tightening”) will be terminated much earlier than originally envisaged. And yet, the year-on-year growth rate of the true broad money supply keeps declining noticeably.
The year-on-year growth rates of US TMS-2 (broad true money supply) and the narrow money aggregate M1. Y/y growth of TMS-2 has declined to a new 12-year low as of March 2019. For some background on the calculation of TMS-2 see Michael Pollaro’s excellent summary at Forbes.
Unsolicited Advice to Fed Chair Powell
American businesses over the past decade have taken a most unsettling turn. According to research from the Securities Industry and Financial Markets Association, as of November 2018, non-financial corporate debt has grown to more than $9.1 trillion [ed note: this number refers to securitized debt and business loans, other corporate liabilities would add an additional $11 trillion for a total of $20.5 trillion].
US non-financial corporate debt takes flight – the post 2008 crisis trajectory is breath-taking, to say the least [PT]
A Growing Gap
The first quarter of 2019 is over and done. But before we say good riddance. Some reflection is in order. To this we offer two discrete metrics. Gross domestic product and government debt.
US nominal GDP vs total federal debt (in millions of USD) – government debt has exceeded total economic output for the first time in Q4 2012 and since then its relative growth trajectory has increased – and it seems the gap is set to widen further. [PT]
Maurice Jackson of Proven and Probable Interviews Jayant Bhandari
Maurice Jackson of Proven & Probable has just conducted another interview with Jayant Bhandari, who is known to long-time readers as a frequent guest author on this site.
Jayant Bhandari
Extrapolating The Recent Past Can Be Hazardous To Your Wealth
“Those who cannot remember the past are condemned to repeat it,” remarked George Santayana over 100 years ago. These words, as strung together in this sequence, certainly sound good. But how to render them to actionable advice is less certain.
George Santayana – purveyor of eminently quotable wise words by the wagon-load, but what shall one do with them in practice? [PT]
Most read in the last 20 days:
A Surprise Move in Gold
Traders and Analysts Caught Wrong-Footed Over the past week gold and gold stocks have been on a tear. It is probably fair to say that most market participants were surprised by this development. Although sentiment on gold was not extremely bearish and several observers expected a bounce, to our knowledge no-one expected this: Gold stocks (HUI Index) and gold, daily. As noted in the annotation above, a Wells Fargo gold analyst turned bearish at the worst possible moment...
May Away
May Gone in June... Yes, now that June is here, it is indeed the end of May. Theresa May, to be precise, the henceforth former British Prime Minister. After delivering her unparalleled masterclass in “how to completely botch Brexit”, British cartoonists are giving her a well-deserved send-off, which we are documenting below. But first, in case you don't know anything about Ms. May's heroic “Brexit”-related efforts, here is an explanation of how she tried to finagle the best...
US Money Supply Growth and the Production Structure – Signs of an Aging Boom
Money Supply Growth Continues to Decelerate Here is a brief update of recent developments in US true money supply growth as well as the trend in the ratio of industrial production of capital goods versus consumer goods (we use the latter as a proxy for the effects of credit expansion on the economy's production structure). First, a chart of the y/y growth rate of the broad US money supply TMS-2 vs. y/y growth in industrial & commercial loans extended by US banks. At...
Elizabeth Warren’s Plan to Bamboozle American Voters
A Plan for Everything! The run-up to the presidential primaries offers a funhouse reflection of American life. Presidential hopefuls, hacks, and has-beens turn to focus groups to discover what they think the American electorate wants. Then they distill it down to hollow bumper stickers. After that, they pump their fists and reflect it back with mindless repetition. A plea for clemency from Mr. 1/1024th crow. [PT] Change We Can Believe In. Feel the...
The Ugly End of Globalization
The Ugly End of Globalization Sometime in the fall of 2018 a lowly gofer at the New York Stock Exchange was sweating bullets. He had made an honest mistake. One that could forever tag him a buffoon. Art Cashin the living hat-stand, going through a succession of DJIA milestone hats. He promised was going to crack a smile for the Dow 27,000 hat photo, alas, it was not to be. [PT] After trading sideways for most of the spring, the Dow Jones Industrial...
Gold vs. Silver - Precious Metals Supply and Demand
Is Silver Still Useful as a Monetary Metal? The price of gold jumped a whole twenty bucks last week. We imagine that the marginal gold bug is relieved to be rid of his gold, in this opportunity afforded by the highest price since early April. OK, all kidding aside, the price of silver went up a penny. The gold-silver ratio keeps hitting new highs recently (this is actually a long-term trend, frequently interrupted by strong rallies of silver against gold). Is silver...
Fed Chair Powell’s Plan to Pickle the Economy
A Loose Relationship The Dow Jones Industrial Average made another concerted run at the elusive 27,000 milestone over the last several weeks. But, as of this writing, the index has stalled out short of this psychosomatic barrier. By our estimation, this is for the best. Since early 2018 the DJIA has gone nowhere, albeit in interesting ways... [PT] While not always apparent, the stock market generally maintains a loose connection to the underlying...
Paul Tudor Jones Likes Gold
Gold is Paul Tudor Jones' Favorite Trade Over the Coming 12-24 Months In a recent Bloomberg interview, legendary trader and hedge fund manager Paul Tudor Jones was asked what areas of the markets currently offer the best opportunities in his opinion. His reply: “As a macro trader I think the best trade is going to be gold”. The relevant excerpt from the interview can be viewed below (in case the embedded video doesn't work for you, here is a link to the video on...
The Italian Job - Precious Metals Supply and Demand
Lira Comeback? The price of gold jumped 35 bucks last week, and that of silver 48 cents. The dollar is now down to 23 milligrams of gold. Keith is on the road this week, so we will just comment on one thing. If Italy is serious about moving back to the lira, that will make the euro less sound (to say nothing of the lira). That will drive people mostly to the dollar, but also to gold. Italian deputy prime minister Matteo Salvini (as the leader of the Lega party he is...
Bitcoin: What is the Best Day of the Week to Buy?
Shifting Patterns In the last issue of Seasonal Insights I have discussed Bitcoin’s seasonal pattern in the course of a year. In this issue I will show an analysis of the returns of bitcoin on individual days of the week. Bitcoin, daily – since bottoming in early December, BTC has advanced quite a bit. It remains an excellent trading sardine. [PT] It seems to me that Bitcoin is particularly interesting for this type of study: it exhibits spectacular price...
Silver Remains a Monetary Metal - Precious Metals Supply and Demand
Silver Price Driven by Reservation Demand The price of gold went up a buck last week, but the price of silver dropped back 13 cents. And the gold-silver ratio marches further upwards. Keith spoke at a conference this week, about how to analyze the fundamentals of supply and demand in gold and silver. He talked about the basis of course. Silver coins – silver prices are partly influenced by an industrial demand component, but the fact that they move most of the time with...
Austrian Theory and Investment
Realtime Charts
Gold in USD:
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
Gold in EUR:
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_euoz_2.gif)
Silver in USD:
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/silver/t24_ag_en_usoz_2.gif)
Platinum in USD:
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/platinum/t24_pt_en_usoz_2.gif)
USD - Index:
![[Most Recent USD from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_usd_en_2.gif)
