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Tag Archives: dollar

(No) Dollars And (No) Sense: Eighty Argentinas

India like many emerging market countries around the world holds an enormous stockpile of foreign exchange reserves. According to the latest weekly calculation published by the Reserve Bank of India (RBI), the country’s central bank, that total was a bit less than half a trillion. While it sounds impressive, when the month began the balance was much closer to that mark. Over the last several crisis-filled weeks, officials in India have been fighting against a “sudden” and shocking plummet in...

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Vital Lessons Still Not Learned: Be Careful About GFC2

It’s one of those crisis-level-of-illiquidity things that if you heard about it in normal times it would make you shake your head in disbelief. During a full-blown meltdown maybe it’s not standard stuff, but given the chaotic conditions it doesn’t seem so preposterous, either. Negative convexity is an otherwise benign phenomenon in fixed income that when combined with a lack of liquidity can rip your throat out in a heartbeat. The reason it kills is how it can act like proverbial quicksand;...

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Collateral Shortage Goes Global, Hinting At The Way The (euro)Dollar Reaches Its Eventual End

Government securities have become so scarce that it is driving down repo rates. A collateral shortage that has become so acute, money dealers won’t part with their stock of government securities no matter what the price. Stop me if you’ve heard this before. Except, we’re talking about Japan and JGB’s here rather than UST’s. The trick is that both types of government bonds are being hoarded for US$ purposes. The shortage of JGB’s is due to Japanese dealers desperate to source US$ funding. With...

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Got Gold?

The Fed’s effective nationalization of the financial markets in the past week has spiked gold prices.  It does appear the first phase of the bear market and bursting of  multiple asset bubble is almost complete.  Phase 1, an initial massive deleveraging, brought gold down 15 percent from its recent high before the big spike over the past two days as the Fed announced it will print “whatever it takes.” Gold is now our highest conviction trade and fully expect the 1704 recent high to be...

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#WhatYouMissed On RIA This Week: 03-20-20

We know you get busy and don’t check our website as often as you might like. Plus, with so much content being pushed out every week from the RIA Team, we thought we would send you a weekly synopsis of everything you might have missed. ________________________________________________________________________________ ________________________________________________________________________________ RIA Pro is our premium investment analysis, research, and data...

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Is GFC2 Over?

Is it over? That’s the question everyone is asking about both major crises, the answer is more obvious for only the one. As it pertains to the pandemic, no, it is not. Still the early stages. The other crisis, the global dollar run? Not looking like it, either. Stocks rebounded because of “major helicopter stimulus” or because that’s just what stocks do during times like these. Some of the biggest up days have followed, and are often found in between, the greatest down days. But while shares...

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#WhatYouMissed On RIA This Week: 03-13-20

We know you get busy and don’t check our website as often as you might like. Plus, with so much content being pushed out every week from the RIA Team, we thought we would send you a weekly synopsis of everything you might have missed. ________________________________________________________________________________ ________________________________________________________________________________ RIA Pro is our premium investment analysis, research, and data service....

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At The Worst Times, The Dollar Goes Down When It Goes Up

Is the dollar rising, or falling? Does it matter? In one sense, obviously it does. The way in which the dollar behaves dictates how everything else goes. The potential mix-up and confusion start when we have to define exactly what we mean by “dollar.” Or rising. The rising dollar doesn’t always rise. If we are talking about the US currency’s exchange value, that is. It can get to be more complicated when the system behind the currency, the eurodollar, is driven into overdrive by the most...

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The Black (Eye) Curve

An honest-to-goodness oil crash. For a time this morning, the front month WTI futures contract had fallen into the $20s for the first time since Euro$ #3. Up to now, that prior outbreak had been the more (in)famous as far as crude prices have been concerned. Over the intervening years, it was thought that supply and demand had been made to be more balanced. Though some will say it anyway, this time there won’t be nearly as many mentions of a “supply glut.” What makes oil especially violent is...

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