Very informative video on Deutsche Bank.
Month: January 2020
Chicago PMI Crashes
Doesn’t look very well here.
Gold Demand 2019
New WGC report is out.
Gold demand was down in Q4 2019. Gold supply was also down in Q4 2019 on lower mining production.
U.S. Budget Deficit
Here are the budget projections of the U.S. The debt will never be paid off.
Air Cargo Vs. GDP
Air cargo is correlated to GDP. That is why in 2020, the coronavirus will have a significant effect on GDP as air transportation is disrupted.
Oil Price Vs. CCC Bonds
The energy junk bond market accounts for 13% of CCC rated bonds. This is why when oil goes down, the junk bond sector will get a hit. Oil and banks are interconnected in this way.
FOMC Meeting: Rates Steady
The Fed held rates steady. But what’s very important is that repo is going to be extended until April 2020. This is supportive for gold. Bond yields were falling and starting to invert again. This has implications, because this gives a higher probability of a rate cut coming in March. By the way, he also said: “Many people benefit from low interest rates.” Do you want more evidence that a rate cut is coming?
He also said that excess reserves shouldn’t go below $1.5 trillion, he wanted ample reserves above $1.5 trillion. He said that he didn’t anticipate that the reserves would need to be higher than $1.5 trillion. This means he will expand the balance sheet even more.
Rabobank Expects Recession This Year 2020
The Fed will cut rates to 0% this year.
When is Apple overvalued?
This looks like a bubble to me.
PCE Vs. CPI
The CPI and PCE are both important indicators of U.S. inflation. While CPI is more important from the perspective of an individual, PCE is more important from the perspective of monetary policy.
The CPI and PCE do not cover identical categories of personal spending. The PCE has a broader scope than the CPI, as it captures the expenditures by both rural and urban consumers. Unlike the CPI, the PCE includes expenditures from non-profit institutions that serve households.
The Fed has given preference to PCE due to its broader scope and “chained base” for calculations.
Correlation Economics (Backup) 