Amazing markets. This is what happened today.
*** The growth of the monetary base is absolutely unbelievable (click on graph to enlarge). It is soaring. It is the Fed's recognition that they have been too tight for too long. This is one of the main reasons we have a recession. Now they are flooding the banking system without sterilizing the injection of liquidity. This is excellent news for the economy (in due time) and for the markets.
*** The US dollar Libor rate declined sharply. This is excellent news and may signal that the aggressive increase of liquidity is unclogging the credit pipelines.
*** The dollar is soaring. This is also great news. It is a vote of confidence of international investors for our actions.
*** Gold jumped, but is still 26.5% below the March highs.
*** Commodities and crude oil were down, following closely the price of gold. This is quite typical.
*** Yields on Treasury bonds declined. Due to flight to safety or lower inflation?
*** Yields on low-grade bonds moved higher. Bad news!
*** Stocks declined.
Bottom line. Slowly and steadily the stars are aligning.
More, much more when you subscribe to The Peter Dag Portfolio by going to https://www.peterdag.com/.
George Dagnino, PhD
Editor, The Peter Dag Portfolio
Since 1977
1 comment:
Do you believe as others believe that Hedge Fund Redemptions Are Driving This Market Lower?
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