The narrative being weaved here is weaker than expected economy equates to a do nothing Fed. If the Fed isn’t going to hike, hike, hike, then the deflationary vortex may commence — sweeping into it the entire stock market.
The May jobs report missed estimates: 138K vs 185K
Futures have been halved and are barely higher.
WTI crude is sinking lower, now off by 2.2%
The euro is skyrocketing v the dollar, higher by 0.5%.
Gold reversed losses and is now +0.52%.
And, most importantly, bond yields are getting crushed — with the US 10yr down 5bps to 2.17% Because the 2yr is only down by 2bps, that means the US yield curve is flattening again, which should bode poorly for US equities, especially banks.
The US yield curve spread is only 89bps now!!!
By the looks of it, I might be reducing my equity exposure after all, in exchange for more GLD/TLT.
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Gold should be 8 to 10k an ounce if it wasn’t for the central bank fuckery. Do you have at least 10oz bullion in your physical possession? That’s the bare minimum I recommend. A man of your means could easily buy and store 100 ounces. The dollar is all but worthless so it’s a good hedge by any means. Track the price of gold the last 50 years, price fixing and all. Then run a graph of that against the dollar inflation. Eye opening isn’t it.
+3
I thought lower rates lead to higher inflation, not a deflationary vortex. Wasn’t that the whole story from 2009 and on…until it wasn’t?
Yes but market is priced to perfection no actualy it’s priced to etherium.
perhaps you meant priced to ‘aether’, a hypothetical substance supposed to occupy all space, just like the imaginary value of fiat confetti garbage that the FED conjures out of nothing on daily basis.
The Austrian school of economics never signed up to that theory and in fact predicted that lowering interest rates will lead to deflation and capital destruction. It was only the Keynesian PhD retards and self-congratulating bolsheviks in service of the usurious CB cartel that peddled this ‘low rates, higher inflation’ garbage.
Longview
Wrong.
Lower rates have proven to do the exact opposite. Negative rates in europe are by definition deflationary. Over 30 yrs of Japanese zero rates have done nothing to stoke inflation. As our rates drop, it’s more of a sign that something is wrong, nothing to do with inflation.
were you looking over my shoulder when I was typing…?
So are low rates the cause, or the symptom? Are you saying that to accelerate the economy the Fed should embark on a substantial rate increase path?
Being the populist I am, I think an important issue is that too much wealth is tied up in too few hands, reducing demand. I’d rather see rates low. And if you want to cut taxes, I’d cut payroll taxes.
Neither. Irredeemable debt is the cause. Letting usurious hofjuden bankrupt countries and print their fiat garbage is the problem nobody talks about. Falling interest rate structure erodes and destroys capital (23 page PDF):
https://tinyurl.com/ybyou9qq
Are these figures close to correct:
*Total US Debt $20T
*Total US Private Net Worth $90T
* Net Worth of top 1% ~33% of total = $30T
Seems like the top echelons — those elites — have benefited disproportionately from the ballooning debt.
Are these stats close to right? Don’t they imply a solution?
Why is our populist president going the other direction?
BTMFDCL
Currency war, trade war then human war. Equity rises in currency wa, which we already had. Equity falls during trade war. Which is happening now.