"There’s still a lot of fear out there," warns one investor as the combination of event risks (e.g. Brexit, Spain, US Election) and the contagious collapse of central bank credibility has asset managers around the world piling into bonds and bullion. With negative rates now de rigeur, global developed market bond yields are pushing record lows as demand for protection from fiat debacles in precious metals (and alternative currencies) has sent money managers long position near Aug 2011's record highs.
on "Brexit": long gold, short peripheral debt versus bunds, long EUR vol vs GBP, short volatility/long risk once sterling troughs. on "Bremain": long DM equities for the bearish positioning unwind and short volatility immediately; short Spanish & Italian bonds vs. gilts.
While it may very well not last and all of yesterday's gains could evaporate instantly if the Brexit vote is set to take place as scheduled, all 10 industry groups in the MSCI All-Country World Index advanced, with the index rising 0.7% trimming the week’s drop 1.6%. The Stoxx Europe 600 Index rose 1.4%. Futures on the S&P 500 were little changed, after equities Thursday snapped their longest losing streak since February. . Oil rose, paring its biggest weekly decline in more than two months. Bond yields around the globe fell.
So, Wall Street banks control the boards of directors at the Fed banks. The Fed bank boards of directors appoint the committee members who set monetary policy. And the monetary policy they set ends up being a gigantic tax... a transfer of wealth from the middle class to a tiny group of beneficiaries, including the US government and the banks themselves. This is an unbelievable scam... and it truly is taxation without representation. Unelected bureaucrats impose their will over the entire financial system in a way that benefits a handful of people at the expense of everyone else.
With precious metals prices soaring this week, month, and year on the back of flailing Fed credibility, it is not entirely surprising that assets in exchange-traded funds backed by silver have swelled as investors seek a haven from global economic and political risk. In fact, as of today, Silver ETF holdings have never been higher...
One of the oddest things in this increasingly odd world is the spread of negative interest rates everywhere but in the US. One answer is that the Bank of Japan and the European Central Bank are buying up all the high-quality (and increasing amounts of low-quality) debt in their territories, thus forcing down rates, while the US Fed has stopped its own bond buying program. The other answer is that this is just one of those periodic anomalies that persist for a while and then get arbitraged away. And Brexit might be the catalyst for that phase change.
Extreme shortages of food and power continue to ravage the country of Venezuela, and ordinary people have been paying the price. With triple-digit inflation, that “price” is expected to continue to soar even higher. Even scarier is the estimated pace of acceleration – by 2017, the IMF expects Venezuelan hyperinflation to climb to a whopping 1,642%. Our brains have trouble computing numbers of this magnitude, so we created today’s infographic to put things in perspective.
For over a hundred years, it’s been theorised that author L. Frank Baum wrote his 1900 book, “The Wonderful Wizard of Oz”, as a fanciful way to explain the economic situation at the time and that the Yellow Brick Road was a reference to the path created by gold ownership. Whether or not the theory is correct, for many people today, “Follow the Yellow Brick Road” might serve as a mantra for alleviating economic woes.
"We want to pull out the physical gold... We want to take this gold and we want to store it. We believe that having the physical gold in the vault makes a lot more sense than selling it at these prices. Gold is ready to move. We believe it’s going to continue to rise... we’re going to be storing our gold and holding it for the long-term."
The tide is starting to shift, the pendulum swung too far and now it is starting to return back to the center. The tools that the government used to "shame" us into walking in step are no longer working and the curtain has been pulled back.