interest rates Archives

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Japanese MMT – the last domino to fall

Rising wage settlements and the falling Yen may have finally forced the Bank of Japan to reverse its negative interest rate policy, if recent media leaks ahead of its March meeting are to be believed. Behind this however, is the inexorable pressure to fund structural deficit spending when previous debt monetisations are cascading through into […]

Deja Vu – but have the lessons been learned?

“Follow the Fed” has been a winning investment strategy, but that ought to be confined to what the central bank is actually doing rather than the narrative that it is trying to communicate. Since early December, that narrative has been plainly on offer, with Fed Chair Jerome Powell signalling a series of interest rate reductions […]

United States can “certainly” afford to support wars on two fronts – Yellen

A runaway deficit already at around $2tn pa and rising interest rates as the US government is forced to compete for funds to pay for this and US Treasury Secretary Janet Yellen wants us to believe her administration can afford another war. For those bond funds already burned from believing her claims in 2021 that […]

June US employment running warm, rather than hot – albeit a bit of a red herring for US Fed rates

If yesterday’s 10 year yield bounce to over 4% was a function of a more aggressive further interest rate rise by the Fed this month after the June ADP figures, then today’s cooler employment estimates for June from the BIS in its non-farm payroll figures may help dampen some of those fears. All this however, […]

A very odd recession!

Oh what a wonderful recession it is. Perhaps this is just the Sitzkreig before the real impacts are felt, but for now the stats from US employment data has yet to support the widespread news narrative of layoffs as the BLS reports US net private sector job growth approaching +400k in January. Maybe the fear […]

The monster from the ID – inflation

The 1956 movie Forbidden Planet was at its core a tale of hubris; that technology can overcome nature, whether for Krell or human. The analogy for markets might be the conceit that the business cycle can be expunged without consequence and that one can borrow oneself out of debt. Like the ‘monster from the Id’ […]

Fog of war, or just fog?

Talk about fast markets. Blink and you might have missed WW3, as markets broadly return to where they were just 5 days ago. Good news however, may not be so positive for asset prices as waning emergencies mean fewer excuses by hard-up governments to keep printing their way out of deficits. And that means its […]

US debt ceiling and the point of no return

What is the drifting gold price trying to tell us, because rising inflation and reckless government fiscal policies suggests impending currency debasement? Is this just another case of cognitive dissonance, that has accompanied COVID-19(84), or perhaps a temporary phenomena such as a big holder being forced to sell gold to raise USD to cover some […]

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