An update of the weekly inflation vs deflation google insights chart for 31/7/11. The indicator show that inflation fears (relative to deflation worries) continue to subside from the exuberant peak of February of this year.

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An update of the daily treasury statement charts for 29/7/11. Rather eerily, the lagged charts of the total operating balance of the US Treasury vs. US equities (inverted) continue to show a spooky correlation.

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The total size of the Federal Reserve’s balance sheet declined by $7,795 million during the week ending July 27th 2011. In the post-2008 world of perennial central bank balance sheet expansions, this is rare (and probably temporary). Presumably, we’ll be seeing such contractions over the coming weeks; so we should savour them and position ourselves accordingly!

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A few weeks back, we mentioned that ’we would embrace [a short-term higher high in the dollar index] as an opportunity to take part on the long-side‘. The dollar index has come under some pressure over the past week, so just in case any of our readers were wondering if we’ve changed our minds completely, I thought I’d highlight why we’re sticking to our long dollar position for now (even though the immediate price action hasn’t corroborated this view yet). In the process of outlining our view, I’ll go over our philosophy on currency speculation and consider the breaking correlation between the dollar price of the Euro and the dollar price of gold.

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An update of the global real interest rate charts for 27/7/11. The important markets of the world continue to display negative real interest rates, however we’re starting to see improvements in various pockets of the world.

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Jim Rogers was interviewed by the Wall Street Journal on July 25th 2011. He spoke about the supposed ‘Debt Ceiling Crisis’, the US dollar and US government bonds. See below for the video & summary.

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The great worry that hastened the establishment of the world’s central banks was that monies tended to fluctuate in value. Here, I explain how such ‘fluctuating money values’ came about and — importantly — how this attribute has since mutated. Hopefully, by the end of this article it should be clear that it is changing money, and not fluctuating money values, that one should be focussed on!

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