John Rubino – With Fed Policy, You Don’t Get A Crisis-Free Future
John Rubino, Founder of the Dollar Collapse website, joins us to discuss the market trends for 2022 in interest rates, bonds, GDP growth estimates, inflation, stagflation, market volatility, and gold.
We start by reviewing the move higher global in interest rates, as many central banks have started hiking rates, and there are less bonds being purchased, so the expectations for higher rates are in the markets. John outlines that there are some estimates for GDP growth to fall, and how with the higher inflation, that the Fed may actually be starting to hiking rates into a problematic backdrop of stagflation.
Next we ponder if the Fed has been trying to slow-walk the rate hike cycle long enough for some disinflation to set in, and take some of the pressure off. John feels inflation will still be high enough to keep real rates meaningfully negative for the foreseeable future. When one considers the planned Fed policies and the current macro backdrop, this will continue to create volatility and John believes more investors will gravitate towards real assets, including gold and silver, over the recent narrow focus on just financial assets.
We wrap up looking at the disappointing retail sales numbers from December, and how it may be indicative of consumers slowing down their spending. With the stimulus money spent, the sugar-high effect from the reopening trade waning, and increasing consumer debt loads this lack of demand may be another factor the takes some pressure off inflation, but it would be counterbalanced with slowing growth, creating a very uncertain path forward for the economy.
It is funny that while the Central Banks have been trying to jawbone the markets into submission, that now China is trying to jawbone the banksters into place. Haha!
China Biggest Property Developer Swoops In With Mini Buyback As Bonds Slump
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By Marc Jones and Andrew Galbraith – Reuters – January 17, 2022
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“China’s biggest homebuilder by sales, Country Garden, scooped up $10 million of its own bonds on Monday as the country’s ongoing property crisis sent then sprawling again.”
“Last week was the worst on record for Country Garden’s bonds and fresh falls of up to 17 points on Monday left most of its international market debt at 25-35% below its face value.”
“Analysts cited reports that it had dropped plans to raise $300 million last week after debt market investors had shown insufficient appetite.”
“Country Garden’s share price had tumbled 8% in Hong Kong, though it wasn’t the only one to see sharp falls. Central China Real Estate (0832.HK), Yuzhou Group Holdings (1628.HK), KWG Group Holdings (1813.HK) and Sunac (1918.HK) all dropped between 2% and 5%, even as China’s central bank unexpectedly cut one of its key interest rates.”
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https://www.reuters.com/markets/europe/china-biggest-property-developer-sees-bonds-slump-2022-01-17/
What are SmarterMarkets? Episode 1 : Jeff Currie, Goldman Sachs Global Head of Commodities Research
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For the opening episode of our new series, legendary podcast host Grant Williams welcomes back Jeff Currie, Global Head of Commodities Research at Goldman Sachs, to examine the question “What are Smarter Markets?” What are SmarterMarkets? SmarterMarkets is our vision for using technology to redesign and improve markets to meet society’s biggest challenges, including climate change and the energy transition. SmarterMarkets is also our weekly podcast, bringing you the entrepreneurs, icons and executives of commodities, capital markets and technology to rant on the inadequacies of our systems and riff on ideas for how to improve them. Our three-part series “What are SmarterMarkets?” will include Jeff Currie, Head of Commodities Research at Goldman Sachs, Josh Crumb, CEO and Founder of Abaxx Technologies, and Erik Townsend, host of MACROVoices.
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https://tinyurl.com/33pv26zk
The economic system has proved itself too complex for The Federal Reserve. Smart Artificial Intelligence has proved to be too powerful for humans. It will take smart machines to run smart markets. The Federal Reserve is not wise enough to know how to apply the bridle to the financial system, and then to know how to keep their grip upon it, and use their powers at just the right time to control these markets.
Technology will be able to diagnose a treatment, and get the economy to respond to treatment by applying the proper levers.
An old order of human guidance is giving away to powerful machine technology. DT
Good points DT. Yes, like the old Terminator films, it is a “Rise of the machines.”
Goldupdate!
Been consistent with my approach and I keep saying the same time. The bottom in gold is in and we ain’t going lower im very convinced about that. My focus is on the miners and timeline is way stretched and the shorts are in big trouble. The pendulum has shifted in the miners like 3 months ago when I purchased the lows. The prices you see now from the leading producers is a walk of worry correction and now begins the phase up of the developers and they start to move. Explorers will leach on.
We here about other websites and YouTubers and host, but we got some in here that should be promoted and I’m sure many listen in.
Glen is here telling you all and sharing his “ Own views” that I’m closely watching the Cad a leading indicator for years now and have mentioned this many times and said this not only will we hit parity but we will surpass parity with the US dollar. Obviously 2/3 years out.
That puts the miners breaking all time highs!
The fireworks are just getting started and when moves come it ain’t slow allowing all I’m a bull market does not work that way. You don’t time these things. Your either early to the game or late conservatively. Either approach I respect.
The bull is alive
Glen
Thanks for sharing your outlook on the PM sector with us Glenfidish, as it is appreciated.
let the fireworks begin Glen…think most of us here are positioned for it
Inflationary pressures have been affecting many miners bottom line! As rick rule and many others would say including myself, a restructuring or new valuation of gold price will fix that shortly.
Glen
I thought Joe Mazumdar had some great points on the weekend show, about how inflation had definitely crimped the margins of PM producers and future margin expansion much more than with other base metals producers, that saw their underlying metals and primary products move up in tandem with inflation.
Two big red candles against gold at about 10:40EST. Just when everyone is trading and volume high … not. Or just a big trader wanting to sell at the worst possible price on a Monday night instead of Sunday night…oh, holiday threw the algos off a day.
Yep, it seems like the biggest players in the PMs love selling at the most illiquid and inopportune times for some reason. 😉
Some up … some down….and wiped out Canadian market yesterday. So we are back to End of Friday.
Late November, CGN Mining(1164:HK), the only uranium miner listed in China, did a share placement with a Chinese SOE(they called it a cornerstone investor). It was for 1B shares @ .80HKD when the market price at the time was .98HKD, an 18% discount. CGN said it was a good deal for all shareholders but the shares have been drifting lower, likely on their way to .80HKD or lower.
This is what you get with this kind of government…shared prosperity where some other guy gets my shares at a discount.
Yeah, it’s normal for shares to drift down to the private placement price as a floor, but doing the capital raise at an 18% discount to the market price does not sound like a good deal for all shareholders. With the Uranium sector doing so well we should be seeing the opposite where capital is raised at a premium to the existing market price if there are warrants attached, or at least at parity with the current market prices.
At least the uranium sector showed some life down under…..been consolidating for a while now….. I’m ok with it consolidating little longer as I would like to accumulate more but am already fully invested after acquiring some tax loss bargains and some Doc Jones picks along with my PM holdings
I’d be fine with the Uranium stocks making another run higher at this point, bouncing off that bottom trendline of the channel as support from the recent corrective move, that Steve Penny pointed out on Friday.
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However, if the U stocks dive down even lower, then I’d add some to my positions and take them from 75% to more like 85%-90% positions in that kind of environment.
My preference would be a nice rally though, but am fine either way at this point, as medium-term to longer-term, I’m still quite constructive on the space.
Dollar Week : Breaking Resistance (Former Support)
https://saturationtiming.blogspot.com/2022/01/dollar-week_18.html
Official Notice: for this week only this month, the normal Monday miner market has been moved to today.
Are the miners and physical commodities feeling sorry for the over valued General Markets falling again. We never learn…
I assume there is no intervention in all markets because miners are stocks. Wasn’t that someone’s old wife that came up with that tale. What does the new wife say?
we may just fall off the cliff in here. Bulls in denial, bears burnt too many times with short term lows.
Uranium crushed off Nov highs and looks for lower lows while everything I read is that it’s conclusive for it to be the magic bullet to stop gap energy transition.
Gold as usual, in a flouder, as all fundamentals point up but nobody cares
The continual naysayer who pops in from time to time …..please feel free to indulge us with your wisdom on where our money should be. Save us
nothing can save you. The naysayer has been saying for weeks to watch the paint dry with gold amidst all the happy talk. And finally now a potential thud with convential markets.
jonsyl – Uranium went on a huge run last year and consolidated those outsized gains some the last few months, but where are getting the information (either fundamentally or technically) to form the position that it is looking for lower lows?
I’ll try and dig up the analysis I recently read, which basically disputed the reversion to uranium supplied energy exempt perhaps with China due to a number of factors, anti nuke mentality particularly in the Europe, Japan and to a large extent US. The reinvestment is more likely to be first focused on carbon energy producers first, as the disinvestment in carbon energy is far more recognized due to climate change alarms and which has been instrumental with the current shortfall. There is also the time and cost it takes to build, upgrade etc nuclear capacity.
Well at the big COP26 global summit this year, focused on energy markets and the gradual transition from fossil fuels, nuclear still played a big role in most countries outlook, and it was announced that there are about 150 new nuclear reactors under construction, planned, or proposed for the next 10-15 years, which will be a substantial driver of more Uranium demand (regardless of what some European countries like Germany are doing), or whether or not Japan brings all it’s reactors back online (which it has been steadily doing). There are no other 24/7 baseload power sources other than Nuclear that are carbon free, and Solar and Wind are not going to hack it for providing all the power needs of the planet.
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From a technical basis, Steve Penny covered the price of Uranium well on last Friday’s interview with accompanying charts, where he sees the next overhead resistance level at $73 after we finish this current consolidation of the huge move upward last year in U308 prices. Just imagine what the tiny sector of Uranium miners will do if we see spot pricing in the $60’s… much less $70s…. There is far more of a bullish trend than a bearish one in this megatrend that is unfolding.
China Is Planning at Least 150 New Nuclear Reactors
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Bloomberg Daybreak Asia – November 2, 2021
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“China is emerging as the world’s great believer in nuclear power. After decades of opposition, budget blowouts and disasters elsewhere, the country has big plans for the power source.”
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https://www.bloomberg.com/news/videos/2021-11-03/china-is-planning-at-least-150-new-nuclear-reactors-video
A lot of talk about oil this AM. Added to my CGX Energy. Speculative but close to possible results/no results. A Doc Jones thing in Guyana. But, it appears there has been some significant finds in the area and most feel Guyana is favorable to resource companies. I would do some DD if interested.
I just did some DD on how to spell Guyana…
Check out Docs latest Petrus Resources for another oil gas play
Good call. I’ve reached out to see if Doc Jones would like to come on the show to update us on his investment thesis around Petrus Resources.
Yes. I saw that and elected to add to CGX rather than Petrus at this moment because I didn’t have that much money and I like the idea of the Guyana situation over Canada. But, that was just a first impression and not anything tangible.
Silver had its best close and volume in 2 months and was particularly bullish considering the action in the stock market and gold. It finished one cent above the 100 day EMA but just below fork resistance…
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=0&mn=9&dy=11&id=p32951520270&a=1099384433
Here’s a potentially more immediately bullish picture for silver in which it finished above the 100 day simple ma for the first time in 2 months as well as Ichimoku cloud and fork resistance:
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=0&mn=9&dy=11&id=p18695764474&a=1099391591
SILJ looks good versus SPY and is getting better. Three forks have been relevant lately…
https://stockcharts.com/h-sc/ui?s=SILJ%3ASPY&p=D&yr=0&mn=9&dy=0&id=p99166570860&a=1099398016
SILJ looks better than GDX despite the current fork resistance for SILJ:GDX…
https://stockcharts.com/h-sc/ui?s=SILJ%3AGDX&p=D&yr=0&mn=9&dy=0&id=p51433101242&a=1099402535
SLV jumped through fork resistance today:
https://stockcharts.com/h-sc/ui?s=SLV&p=D&yr=0&mn=11&dy=0&id=p43111743618&a=1078126175
Silver closed above its 50 and 100 day MAs today for the first time since 11/22 and the widely watched 200 day MA is currently at 24.70 while the 150 dma is at 23.94 and falling fast (about 4 cents per day).
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=1&dy=0&id=p81726795292&a=781484393
The dollar precisely clawed back last week’s .59% loss but it still doesn’t look good.
https://stockcharts.com/h-sc/ui?s=%24USD&p=W&yr=6&mn=3&dy=0&id=t1521823924c&a=653766793&r=1642548516405&cmd=print
UUP topped at its 21 day EMA today and finished one cent below it. Above that, there’s Fib fan and important speed line resistance (red):
https://stockcharts.com/h-sc/ui?s=UUP&p=D&b=5&g=0&id=p54404802463&a=823923061
Silver finished at another interesting technical spot…
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=6&dy=0&id=p91690821176&a=822949633
Those are interesting parallel trend lines to the fork based on other highs for Silver. I’d love to see Silver surprise market participants once again and blast higher, creating a short-covering rally, and catching most investors off-sides…
Don’t you love it? Politicians crushed manufacturing in New York but want us to believe the moronic variant is at fault.
https://finance.yahoo.com/news/york-manufacturing-gauge-slumps-hinting-133001497.html
China Warns West Against Rapid Interest Rate Rise
Xi Jinping says major economies need to be wary of ‘negative spillovers’ hitting global recovery
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Phillip Inman – The Guardian – Mon 17 Jan 2022
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“China has warned the US and Europe against a rapid rise in interest rates that would ‘slam on the brakes’ of the global recovery from the pandemic.”
Central banks should maintain the monetary stimulus or risk “serious economic consequences” from the spillover effects with developing markets bearing the brunt.
In a virtual speech to open the World Economic Forum’s Davos Agenda, the Chinese president, Xi Jinping, said that” while global inflation risks were emerging, policymakers should strengthen economic policy coordination and develop policies to prevent the world economy from dipping again.”
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https://www.theguardian.com/business/2022/jan/17/china-warns-west-against-rapid-interest-rate-rise