The Fed’s interest rate cut yesterday and the prospect of more to come confirms its changing priorities. Consequently, the dollar will weaken against both gold and other currencies.
Would you please provide a graph of inflation - as you define it, ie, printing of currency - compared to the performance of the U.S. stock market? It seems to me that whenever the Fed prints currency into existence the first parties to get the advantage of that new currency are the entities and individuals that buy stocks by the fistful. Therefore, rather than the stock market going down, as you predict, the stock market takes off. Inflation appears to be good for the stock market, even though it may also be good for gold. Who cares if the currency is worth less as long as credit is available? Among the wealthy and the financial institutions that can always get credit, they are going to continue to feed the stock market. I understand that only goes on until it doesn't; but I tend to think that today it can, and will, go on a lot longer than it did in 1929 when there was less currency available and therefore less credit. Please show me where and when what I am writing has been wrong in recent history....especially in the U.S.A. rather than Zimbabwe or Imperial Germany.
I'm not entirely sure but I think there's a bit of the old back door buying going on. (They're all buying each other's garbage) I may be wrong of course 🤷🏻♂️
There is unfortunately a strongly held view that debt can be inflated away by a falling currency. It is particularly unfortunate that those that hold this view feel it's best not to say so out loud, so in this politicized environment, where vigorous debate could help, it is expressed timorously at the margins of events.
This silent - and wrong - opinion will now lead a race towards the bottom among indebted currencies.
Thanks Alasdair. You say "healthy shakeout" and we say "paper smashes". It is hard to believe that you do not believe in these paper smashes. Or do you?
Healthy shake out...??
Only if you survived....)
Fridays triple witch will also be a sea-saw..for the gamblers..
cheers
Would you please provide a graph of inflation - as you define it, ie, printing of currency - compared to the performance of the U.S. stock market? It seems to me that whenever the Fed prints currency into existence the first parties to get the advantage of that new currency are the entities and individuals that buy stocks by the fistful. Therefore, rather than the stock market going down, as you predict, the stock market takes off. Inflation appears to be good for the stock market, even though it may also be good for gold. Who cares if the currency is worth less as long as credit is available? Among the wealthy and the financial institutions that can always get credit, they are going to continue to feed the stock market. I understand that only goes on until it doesn't; but I tend to think that today it can, and will, go on a lot longer than it did in 1929 when there was less currency available and therefore less credit. Please show me where and when what I am writing has been wrong in recent history....especially in the U.S.A. rather than Zimbabwe or Imperial Germany.
Who is buying the debt? To lower rates?
I'm not entirely sure but I think there's a bit of the old back door buying going on. (They're all buying each other's garbage) I may be wrong of course 🤷🏻♂️
Follow the Force... Stay on course Luke 😉
Thanks a lot Alasdair. Was eagerly awaiting your outlook / views after the Fed meet.
Thank you Alasdair.
These dips get shallower and shorter. It would not surprise me if the metals were up 3% tomorrow. Doesn’t really matter to the long term investor.
There is unfortunately a strongly held view that debt can be inflated away by a falling currency. It is particularly unfortunate that those that hold this view feel it's best not to say so out loud, so in this politicized environment, where vigorous debate could help, it is expressed timorously at the margins of events.
This silent - and wrong - opinion will now lead a race towards the bottom among indebted currencies.
Thanks Alasdair. You say "healthy shakeout" and we say "paper smashes". It is hard to believe that you do not believe in these paper smashes. Or do you?
I don't understand. The current Dollar Trade Weighted Index is more like 120.
It looks like the chart is the DXY, which AFAIK is not trade-weighted
It is trade weighted against 6 major currencies, with the EURO carrying the highest weight (57%)
Thanks. Appreciated.