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Post by Deleted on Sept 15, 2022 22:04:32 GMT
The problem today is a worldwide dollar shortage.
Everyone wants high-quality collateral - US Treasury bills.
The Euro Dollar dilema.
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Post by Deleted on Sept 16, 2022 17:21:08 GMT
The problem today is a worldwide dollar shortage. Everyone wants high-quality collateral - US Treasury bills. The Euro Dollar dilema. Along with the increasing high yields, the dollar is certainly starting to cause serious problems. It's the only flight to safety at the mo. Overall though, comparing the dollar to other currencies is a bit like being the best house on the worst street in Maidstone. Bloody fiat! |
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Post by Deleted on Sept 16, 2022 18:18:07 GMT
The problem today is a worldwide dollar shortage. Everyone wants high-quality collateral - US Treasury bills. The Euro Dollar dilema. Along with the increasing high yields, the dollar is certainly starting to cause serious problems. It's the only flight to safety at the mo. Overall though, comparing the dollar to other currencies is a bit like being the best house on the worst street in Maidstone. Bloody fiat! Or Mersin with Hadler😁 |
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Post by Deleted on Oct 10, 2022 17:26:13 GMT
There are quite a few potential black swans on the horizon that seem to be getting uncomfortably closer as time marches on. Some of them possess the odour of Lehmann Brothers (Credit Suisse, Deutsche Bank, and the like), and others have a strong whiff of unregulated shadow banking, which seems to be responsible, in part, for the excessive rise in real estate prices in the US.
The problem is that the global financial markets are so intertwined, and extremely complicated, it is almost impossible to determine where the actual trigger will come from. One thing is certain, as central banks continue to raise interest rates to 'try' to cool down inflation, and bring down bond yields, the closer we come to that trigger. The luxury the Fed had in running the fiat printing press to bail out banks is not so easy these days without increasing inflation even more. But something has to give, as the Fed seems to be finally running out of room to manouver.
As a side note, it is interesting to see Liz Truss fighting the Fed. Hilarious. I'm sure she will glow in glorious victory as the UK economy expands into prosperity as the global economy sinks into the sloth of despond. Priceless. Tip for Truss - pivot only when J Powell pivots, otherwise it is billions down the drain. Period.
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Post by Deleted on Nov 3, 2022 18:07:36 GMT
Can somebody cleverer than me please explain how you control cost push inflation by constantly raising interest rates.
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Post by Deleted on Nov 3, 2022 18:22:24 GMT
Can somebody cleverer than me please explain how you control cost push inflation by constantly raising interest rates. My guess would be that by raising interest rates that Joe Public will not have the money to pay the outlandish prices of products which means the suppliers will have to drop the cost of the product or it will go unsold. This is probably bollocks becos I'm an idiot and in no way cleverer than you.🥴 |
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Post by Deleted on Nov 3, 2022 18:53:32 GMT
Can somebody cleverer than me please explain how you control cost push inflation by constantly raising interest rates. My guess would be that by raising interest rates that Joe Public will not have the money to pay the outlandish prices of products which means the suppliers will have to drop the cost of the product or it will go unsold. This is probably bollocks becos I'm an idiot and in no way cleverer than you.🥴 My understanding is that's how you tackle demand led inflation. It seems counter intuitive to do it for cost push. My understanding is that higher prices fuel higher wage demands which in turn fuel higher prices ad infinitum. Add high interest rates into the mix surely in increases the higher wage demands pushing prices even higher. Maybe I'm wrong, my knowledge on the subject is pretty basic. |
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Post by Deleted on Nov 4, 2022 8:49:21 GMT
My guess would be that by raising interest rates that Joe Public will not have the money to pay the outlandish prices of products which means the suppliers will have to drop the cost of the product or it will go unsold. This is probably bollocks becos I'm an idiot and in no way cleverer than you.🥴 My understanding is that's how you tackle demand led inflation. It seems counter intuitive to do it for cost push. My understanding is that higher prices fuel higher wage demands which in turn fuel higher prices ad infinitum. Add high interest rates into the mix surely in increases the higher wage demands pushing prices even higher. Maybe I'm wrong, my knowledge on the subject is pretty basic. I'm sure nws will put us both right in due time |
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Post by Deleted on Nov 4, 2022 8:57:52 GMT
Does make you wonder. Inflation is primarily driven by energy costs at the moment, plus the Truss/Kwarteng clusterfuck which spooked the markets pushed up borrowing costs and so on.
Apparently, increasing interest rates is the only weapon national banks have to control inflation, by reducing the amount of money people have in their pockets and (potentially), encouraging them to save.
Given that ordinary people are already feeling the squeeze, quite why doubling the pain is necessary is beyond me. As for encouraging saving - if you haven't got anything to spare, how can you save? Also, if inflation is running at over 10%, but savings rates are only 3%, then what's the point?
Hopefully, cgr will post an explanation, but it certainly makes no sense to me. But then nor does shelving investment in future proofing our energy supplies (Sizewell likely to be on hold, likewise onshore wind) at a time when global warming looks every bit as big a threat as Clad the Vunt.
Still, changing your mind about pretty much everything seems to be what one does these days, so who knows what our political masters will decide next?
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Post by Deleted on Nov 4, 2022 20:01:02 GMT
Can somebody cleverer than me please explain how you control cost push inflation by constantly raising interest rates. Can't You need to crush demand or resolve the supply side issues causing the cost push inflation. |
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Post by Deleted on Nov 6, 2022 19:58:45 GMT
Can somebody cleverer than me please explain how you control cost push inflation by constantly raising interest rates. Can't You need to crush demand or resolve the supply side issues causing the cost push inflation. Yep. With what appears to be the start of a long-term bull market in commodities, it is going to be interesting to see what the future holds in store for us all. |
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Post by Deleted on Nov 6, 2022 21:55:59 GMT
Energy stocks are the play of the day. We need energy to live. Simples really.
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Post by Deleted on Nov 7, 2022 8:52:12 GMT
In the USA, oil firms have made combined profits of 200 billion dollars so far this year, while CEOs of the FTSE 100 companies have seen their bonus rise by 25%.
As ever, money follows money.
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Post by Deleted on Nov 7, 2022 12:03:41 GMT
Energy stocks are the play of the day. We need energy to live. Simples really. Agreed, although I am always wary of anything linked strongly to Natural Gas. It is not called the widow maker for nothing. Don't get me wrong, it can be extremely lucrative, but it can also rip your face off in the blink of an eye. |
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Post by Deleted on Nov 8, 2022 10:46:01 GMT
1) Bitcoin looks like it might finally be starting to breakdown on large volume today. Could obviously be completely wrong, but my personal target is eventually sub 10,000.
2) Although financials and the transportation sectors have been quite bullish over the past month or so, I do not like to see the Dow Jones industrial average leading the market over tech. It represents the old economy, and in the past has not proved to be a sustainable leader going forward. At the moment, and for the next couple of months or so, the market seems to be at a critical point. We have not seen any form of capitulation yet, and indeed it might not happen, but nothing is safe if panic sets in.
3) The dollar has been weak recently, and although it could still bounce back and test the recent highs, big money has started to buy Gold at around the mid 1620 level. Could be as a result of the mid terms, or more likely the realisation that stagflation is a real threat, which is also positive for commodities in general.
4) Although it would be of no surprise, it looks like the Fed is going to relay on deflation to take care of the current inflationary/stagflationary environment. They will probably continue to raise interest rates to around 5% overall, give or take, and hopefully catch up with the 2 year yield, but who knows. One thing is for sure, in the end they will take credit for controlling inflation by raising rates when they did. Wonderful.
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