Well Well
Gold finishes the week up about 11 ish USD,
AUD gold price up about the same.
improvement on last week
pretty amazing imo considering the absolutely wild FX moves this week.
New Japanese PM who is expected to keep and be loose,
Japanese 10 year moves after a few weeks of being positive for the first time in absolutely ages back towards 0% -
back towards BOJ target
Anyhooooooo
Fed balance sheet, well you you recall the sell off the other week in Teck and big spike in old interest rates, this of course was reflected in the data which showed the Fed was on an absolute selling spreee of it security holdings,
of course the Fed balance sheet you will now see they went on a massive buyback following the equities sell off and spike in rates, wow big big purchases in the data released this week - it cost alot to the taxpayer debt to bring rates back down from above 70 BPS on the US 10 year, more than double what they sold the previous week was bought straight back.
Looks like they had to buy them back from the institutions and buy alot more at a hefty price to taxpayers to bring that immediate spike in rates back down.
With the world records of debt issuance continually being achieved,the last thing anyone would want at FEd is a rise in rates.
They were successful, 70 plus BPS and climbing smashed back down to 68 ish --------future generations of taxpayers will pay for that
Overall FED balance sheeeeeet - expanded straight back up there -
Money supply down slightly considering the balance ,
https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htmSome interesting data out this week globally, car sales after initial pop for the last few months, straight back down, ignored though by most. industrial production, retail sales etc eased considerably
Retail sales across globe really down on month, maybe soon the W leg will be reflected with the string of data showing the high sugar dose was spent and with many programs either ending or income support being reduced you can see the sugar, despite eye popping amounts hasn't really had an enduring affect.... consider what they spent in 2008 and how long it lasted, now they are spending trillions and 4 months later things things are fading - the effectiveness of globally printing to support and stimulate hasn't lasted as long.in current data sets
Other things of interest
I see the simple graph of a company share price life cycle again being used once again to justify claims of a gold price/ market being in the bubble mania phase.
Interesting, not many cycles are considered one year as per the gold price chart used here to justify claims of mania phase
Of course in markets you can have any interpretation you want.
Lets look at a longer price chart of Gold USD to see where it could be from another angle vs the justification chart used to justify a MANIA call
VS looking at a longer term price chart of a commodity
View attachment 2495768well on a long term basis just looks like its in the second phase to me, but like all things you can present anything you want right.
I also see Gold etc compared to "index" argument again - shsssssh.Again you can present anything to SELL stuff to people.
Lets consider this argument being used and having been used previously in some form
Since 1900:
Total Return Index +6,861,465%Gold +8,175%Silver +3,947%
Precious metals are complete duds over any decent period.
WOW screams what a winner right?
Total Return Index +6,861,465%Amazing, again you can post whatever you like to sell something over something else, but good to at least understand what is being presented.In that Stella justification above that PMs are useless compared to this total return.firstly that chart is partly based on the wilshire large cap 5000 index, a man made index which has revolving components and is based on 750 companies over a certain amount and its was only created in 1990's........pffft its just a benchmark used by certain find managers and their mandates......... it does have some good stuff in it but still its not the market.how many of those companies in the current large cap index calculation saw 100% of their dividends reinvested 100% via the DRP?Its a bit like comparing gold to an index, lets call it the dow, when you add 100% more companies to the index (yes look it up, like in early part of last century) what is going to happen to the index number? when you issue shares and take in capital, what happens to an index? It goes up in theory, the market is supposed to be there for capital formation-------how many shares were on issue in 1990 Vs today, whats been happening since low rates and QE came in in 2008 - yes shares go down, index should go down but the PE goes uo as shares go down and its 2020 its all about the Earnings,,,,,well at least when it suitsAnd best off all, all these charts from time to time calculating total returns with div reinvested, WTF - someone please list me any major company in the dow in the last 12 months, or s and P 500 or the XJO for that matter where a DRP was taken up 100% last year and if you can tell me one, which ones had the DRP taken up 100% in the previous 2 3 4 5 years........ remember the graph claiming a total return with divs reinvested, how many investors have done that ? Its not realistic and not reflective of the overwhelming majority of investors.who here cn say that all divs they received in the last 10 years were 100% reinvested in a DRP?fantastic marketing document these charts imobut who cares about that graph, here is one that beats everythingforget investing in equities, property or metalscome to the casino,starting with 100 dollars, if you invest in the right single winning number on a roulette table (35 :1 ) ONLY 6 times and let it ride
(let it ride is like reinvesting the dividends you get on a stock)
you would have made more than any investment on the planet ever, I dont need a chart, equities have been a total dud over the last 100 years compared to this investmentstart with 100 USD, invest it only six times correctly and reinvest the winning dividends and boom put this in your calculator, greatest returns ever100 X35X35X35X35X35X35kills property investing right? , in fact it kills all investments ever.....so casino bet investing is the best right. - dont buy property its under performed casino bet investing.....I just proved ityou'd call me a F idiot right if I tried to sell that to you?, so my suggestion is understand at least what is being presented on anything when trying to get you to invest in one thing vs another - sometimes the info whilst seemingly correct inst actually reflective of anything or reality.....I also interested in the comments that it was the Corona that spurred the last move since NOV 2019 in the gold price and what other justification could there be, and when a vaccine comes out its basically downski.fair enough , but of course in early and mid 2019 all Central banks started slashing rates with falls in data despite claims of almost full employment, and in late 2019 Fed cut rates after starting a 2 day repo program in an economy claimed to be almost at full employment, and in march 2020 it cuts its rates to zero and has just confirmed it wont move on them till 2023.
Sure a vaccine may come, mega billions has been paid upfront by governments all over the place but non of them are indicating they will lift rates and normalize policy any time soon, trade tensions are everywhere and protectionist policies and moves are being made everywhere, gold as an alternative to cash remains supported imo. And with low interest rates and negative rates being pushed globally, the idea of bonds in a portfolio are being challenged, people are realizing that as equities fall, rates get interfered with by the issuers and the balancing nature of the old school portfolio construction isn't as good as it used to be.
Speaking of Manias,
if you see ppl are buying many properties sight unseen there is mania right there. Those that are mostly in cash and term deposits may be missing out on the mania on paper but they are probably in a safer position. Sight unseen property purchases, junior agents involved in mega transactions making 90K,....there is mania,,,,,,but it is NZ they love talking up the negative rates idea.
Anyoooooooo, HCT the alternative to Gold not a mania despite assurances it was looking good, 17-20 plus cents and thud 6 cents, but property is healthy with people buying sight unseen ..... go figure.......it 1999, sorry i mean 2020
Good luck
