November 14, 2019
With bonds and gold rallying and stocks pulling back, GaveKal just warned the US dollar is set to weaken, plus there’s no trade deal and the rest is all bullish*t.
Not A Good Start For The US
November 13 (KWN) – James Turk: “Not a good start for the US governments new fiscal year. Its 1st month recorded a $134b deficit but debt in Oct actually jumped $289b to over $23trillion. A $1trillion deficit this year looks certain; question is how long before 12-month debt growth reaches $2 trillion?”
“There’s No Trade Deal”
Fred Hickey: “There’s no trade deal. “Beijing balks at committing to specific purchases, resists U.S. requests for tech-transfer curbs, enforcement mechanism.” Stock market should be down big. But isn’t. Proof stocks at record highs for only ONE reason- Fed’s money printing.
There’s absolutely no connection today between the real economy (which is sinking) and the Fed”s-money-printing inflated stock market. As we saw in 2000 & 2007, eventually the two will reconnect and the result will not be pretty.”
“The Rest Is All BullSh*t”
Sven Henrich: “The Fed manages the economy by managing the S&P 500. The rest is all bullshit. (See below).
Plus GaveKal says US dollar to weaken…
For the last five years, the world has lived with a consistently strong US dollar. Now, a wind of change is blowing through the world’s currency markets, warns Gavekal’s US economist Will Denyer, and the US dollar could be set for a period of weakness.
For much of the last five years, the US Federal Reserve was the tightest central bank out there, which helped to support the US dollar. But this year the hawk has turned into a dove, as the Fed has cut interest rates and begun to expand its balance sheet once again.
This U-turn not only means that the Fed is printing money again, but that it is now printing more money each month than other big central banks, notably the European Central Bank. This liquidity splurge suggests the US dollar may weaken relative to other currencies.
Meanwhile, risks such as an escalating trade war or disorderly Brexit which have caused investors to seek safety in US markets now appear to be receding, meaning less support for the US currency.
$1,650-$1,700 Gold
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