An update of the long-term real fed funds rate chart. It shows that the long-term tendency for private sector deleveraging remains in force, and that – perhaps – it is worsening.

 

The real fed funds rate is defined as the fed funds rate minus the rate of change in the consumer price index. See the chart below:

continue reading »

An update of the daily treasury statement charts:

continue reading »

Jim Rogers is buying Japanese equities (CNBC March 30th 2011). He said that he was looking to buy before the nuclear situation and that the selling panic may have provided a good entry point. See the videos below:
continue reading »

Here, at greshams-law.com, I update and publish daily treasury statement charts on a regular basis. But why exactly do I bother? Why does it matter? How can it help the contrarian investor?

 

In short, I believe that the daily treasury statement can help us understand the ‘deleveraging pressure’ eminating from the private sector. This is significant because – when the private-sector is under pressure to deleverage – it ends up selling things to ‘buy money’. This can create a cascading set of trades in the current environment and thus can be very bearish for risk assets. I contend that the daily treasury statement can help us figure out the magnitude of the ‘deleveraging pressure’. Combined with a contrarian mindset, these charts can help us execute profitable trades.

continue reading »

An update of the daily treasury statement charts:

continue reading »

An update of the daily treasury statement charts:

continue reading »

What is the essence of the business cycle? Is it a peculiar aspect of our specific age? Or is it deeply intertwined with human nature?

 

Here, I present the idea that holds the business cycle as a product of widely held false premises. If this idea is correct, then the business cycle (as we know it) isn’t destined to continue forever; rather it is bound to continue only insofar as we hold specific false premises.

continue reading »