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Tag Archives: Global Economics

Gold is Not a Function of the US Dollar Nor is Gold an Inflation Hedge

Swings in the US dollar have no long-term impact in the price of gold. Nor is gold an inflation hedge. Three Points December 2004: US Dollar Index 108, Gold $435 April 2009: US Dollar Index 108, Gold $883 November 2014: US Dollar Index 108, Gold $1182 Gold vs Trade-Weighted Dollar Index 1973-Present While gold generally moves opposite the dollar in day-to-day fluctuations, long term impacts are nonexistent. Here is the chart with the index of gold and the dollar set to the same base year,...

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Housing Peaked May of 2018: Cycle Trends Suggest Long, Weak Recovery is Over

Housing starts are down 4% in July. Permits are up 8.4%. Housing Starts Dive Led by Multi-Family, Revisions Negative Housing starts are down 4% in July with multi-family down 17.2% and single-family up 1.3%. Permits are up 8.4%. Let's step back and make sense of it all. Expect Revisions My first thought at looking at the Census Bureau's New Residential Construction Report for July is a frequent one:. Expect revisions. Here are the key numbers, soon to be revised, and perhaps hugely so....

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Trump Wants to Buy Greenland from Denmark

President Trump wants to buy Greenland. His interest is because of its natural resources like coal and uranium. The headline sounds like it's from "The Onion" but Trump seems serious. ​ The Walls Street Journal reports President Trump Eyes a New Real-Estate Purchase: Greenland. In meetings, at dinners and in passing conversations, Mr. Trump has asked advisers whether the U.S. can acquire Greenland, listened with interest when they discuss its abundant resources and geopolitical importance...

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Cass Freight Index Contracts 8th Month: Cass Predicts Negative GDP by Q3 or Q4

Based on global shipping indexes, Cass expects a US GDP contraction in the third or fourth quarter. The Cass Freight Index® Report shows trucking shipments as negative for the 8th month. Key Points When the December 2018 Cass Shipments Index was negative for the first time in 24 months, we dismissed the decline as reflective of a tough comparison. In January and February 2019, we again made rationalizations. When March was also negative (-1.0%), we warned that we were preparing to “change...

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Corbyn Seeks to Stop Brexit Via “Make Me Temporary PM” Pretty Please Offer

Jeremy Corbyn officially offers the same deal again today that the Liberal Democrats have already rejected. Make Me PM Pretty Please ​ Desperation Sets In Should this motion actually succeed (it almost certainly won't), Boris Johnson's likely response would be to refuse to stand down until October 31. For starters the public is tired of this nonsense. More importantly, the Liberal Democrats refuse to go along. Rebel Tories Agree to Meet Corbyn to Stop No-deal Brexit The Guardian reports...

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Tale of Two Economies: Industrial Production vs Retail Spending

Retail sales in July rose more than expected albeit from negative revisions. Industrial production is another matter. Tale of Two Economies - Retail Sales Earlier today, in Eat, Drink, and Be Merry Shopping at Amazon I noted retail sales unexpectedly surged 0.7% in July fueled by Amazon, food, and drinks. Tale of Two Economies - Manufacturing The Fed's Industrial Production and Capacity Utilization for July shows a completely different picture. Industrial production declined 0.2 percent in...

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Eat, Drink, and Be Merry Shopping at Amazon

Retail sales unexpectedly surged 0.7% in July fueled by Amazon, food, and drinks. Eat, Drink, and Be Merry The message from today's retail sales report is Eat, Drink, and Be Merry shopping at Amazon. The Commerce Department reports Advance Monthly Sales for Retail and Food Services jumped an unexpected 0.7% in July, fueled by a surge in non-store retailers and purchases at food and drinking places. Amazon Impact Amazon's impact on retail sales is easy to spot by comparing three-month totals...

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30-Year Long Bond Yield Crashes Through 2% Mark to Record Low 1.98%

The bond rally continues this evening with the Fed in denial and Trump howling. Futures are up a bit this morning as of 1:00 AM central following yesterday's massacre. However, bond yields are again lower. The 30-year long bond just crashed through the 2% level for the first time ever. Don't Worry The Fed has everything under control. So does Trump, the ECB, Bank of Japan, China, Canada, Australia, and New Zealand. What can possibly go wrong? Mike "Mish" Shedlock

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Trump Call Powell “Clueless”: Hello President, What Will You Do For an Encore?

Yesterday, the stock markets rallied 1.5% on news Trump delayed tariffs. Today the markets sank 3%. What's next? Trump Calls Jay Powell Clueless ​ Enormous Mistakes ​ Still Winning Big Despite the mistakes we are still "winning big". ​ Supposedly we are raking in billions. So Why Panic? One has to wonder why, if we are winning big, and taking in billions, Trump Chickens Out, Delays Trade War Tariffs to Save Holiday Season. One Hit Wonder Yesterday stocks rose about 1.5% on news of the...

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Entire Yield Curve Inverts, 30-Year Long Bond Yield Dives to Record Low

The stock markets are getting clobbered and bonds are on fire as recession fears escalate. 30-Year Bond Yield Smashes Through Record Low The 30-year long bond yield crashed to 2.024% this morning and is now just a tad higher. The previous record low 30-year long bond yield of 2.10% was on July 8, 2016 shortly after the UK voted for Brexit (June 23, 2016). Long Bond Yield Down 51 Basis Points Since July 31 On July 31, Fed Chair Jerome Powell made a speech he is going to regret. After the FOMC...

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