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Sign of the Times: Gold Has Its Most Vocal Proponents Helping Sell Jay Powell’s Fiction

Gold at $1800 an ounce has a lot of people you wouldn’t expect lining up in Jay Powell’s camp. What else could it be, right? Bullion is an inflation hedge, that’s what everyone says. Therefore, quite obviously, skyrocketing gold must indicate the dollar destruction gold aficionados are always predicting. Unbeknownst to them, and likely to agitate the hell out of them when they figure this out, they are actually doing the Fed a favor. Powell is trying very hard right now to push up inflation...

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Revolving Claims Labor Market Destruction

Jobless claims are not a BLS statistic, which is one key reason why we might not expect perfect consistency with the major payroll reports at times. Times like these, in particular. Instead, the numbers for unemployment insurance applications and payments are tracked by the US Employment and Training Administration (both agencies fall within the Department of Labor). And if the numbers keep up this way, there’ll be so much less of the former so as to overwhelm any contributions made...

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Europe Losing Momentum With Its Biggest Positives Ever

Italy had been one of hardest hit countries, if not the worst for a good while. For months rather than weeks, life was shut down in an effort to get ahead of COVID-19 while it ravaged seemingly unchecked. It became a buzzword of sorts, the name of the nation synonymous with the pandemic itself. Don’t be Italy.As a result, the economy was shut off more there than anywhere else at least so far as the data was concerned. But that kind of led toward hope and optimism; if the Italians could...

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Yield Caps = Toddlers

The Federal Reserve has cut its QE purchasing pace, and yet the US Treasury Department doesn’t seem hampered by a shortage of bidders for its record-setting note auctions. Far from “too many” Treasuries, prices are once more unequivocal how there aren’t enough. With or without Powell, the auction record is clear and, unlike those constantly talking up the BOND ROUT!!! that never happens, honest. Yesterday, it was the 3-year maturity. An astonishing $46 billion was sold, new high, with a...

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Don’t Low Rates On Junk Bonds Mean Fed-fueled Credit Bubble? No. Precisely The Opposite.

Despite what we’ve all been taught, and what gets reinforced in the media, it’s not really that difficult to get people to see the interest rate fallacy at least where it all starts. Central bankers say that low rates are stimulus when this runs contrary to every bit of historical experience as well as evidence. Yes, they are lying to you.When you begin explaining how by first using government bonds, suddenly it does make a lot of sense. Demand for the safest and most liquid instruments...

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Second Wave Global Trade

Unlike some sentiment indicators, the ISM Non-manufacturing, in particular, actual trade in goods continued to contract in May 2020. Both exports and imports fell further, though the rate of descent has improved. In fact, that’s all the other, more subdued PMI’s like Markit’s have been suggesting. Getting closer to a bottom.Unlike any of the sentiment numbers, however, these trade figures better demonstrate just how far from a rebound let alone recovery the world might be. The hole is...

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Gratuitously Impatient (For a) Rebound

Jay Powell’s 2018 case for his economic “boom”, the one which was presumably behind his hawkish aggression, rested largely upon the unemployment rate alone. A curiously thin roster for a period of purported economic acceleration, one of the few sets joining that particular headline statistic in its optimism resides in the lower tiers of all statistics. The sentiment contained within the ISM’s PMI’s were at least in the same area as the unemployment rate, and therefore they were upgraded and...

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Eurodollar University’s Making Sense; Episode 16: What Is…Eurodollar Mailbag?

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