In the blink of an election, the two worlds of Preppy and Prepper have collided. Rather than the possibilities being remote as doomsday scenarios suggest, potential outcomes are conspicuous in their size, abundance and mystery. What if, after 35 long years, the inflation genie really has been let out of its bottle? Well then, you’d best take cover. Which brings us back to those smartly dressed preppies, who will inevitably go all in on gold.
The US election this Tuesday is the main focus of the week. The key economic release this week is University of Michigan consumer sentiment on Friday. There are several scheduled speaking engagements from Fed officials this week.
It appears that Argor-Heraeus, one of Switzerland's 4 giant gold refineries, is about to be acquired. Including Metalor and Valcambi, that would make 3 Swiss gold refinery takeovers in less than 18 months.
"Rising availability rates on a year-over-year basis in almost every major statistical retail submarket in Manhattan has created uncertainty in the market, while new stores become available daily, adding new supply. It may be some time before available retail space is absorbed."
"If one were concerned about the historically low 10-year Treasury and commercial real estate capitalization rates, perhaps because of potential financial stability concerns, the balance sheet composition could be adjusted to steepen the yield curve." - Boston Fed President Eric Rosengren
The economy has gone suicidal. It is working against the very people who need its energy to survive. It is collapsing on its own weight, and the weight of literally incalculable levels of toxic debt. And it is going to create the greatest disaster of our time, if the warnings from the world’s most powerful bankers are any indication.
"In a looping debate rant, Mr. Trump argued that an increasingly “political” Fed is holding interest rates low to help Democrats in November, driving up a “big, fat, ugly bubble” that will pop when the central bank raises rates. This riff has some truth to it... The stock market should be a barometer of the economy, but in practice it has become a barometer of Fed policy."
“Wells Fargo knew that their unreasonable quotas were driving these unethical behaviors that were used to fraudulently increase their stock price and benefit the CEO at the expense of the low-level employees,” the bankers alleged in state court. “Although this policy was known to top executives of defendants, plaintiffs, as bankers, were blamed for harm to clients and retaliated against."
"we routinely monitor asset valuations, while nobody can know for sure what type of valuation represents a bubble, that's only something one can tell in hindsight, we are monitoring these measures of valuation and commercial real estate valuations are high."
The good news for economic prosperity and freedom is that the failure of the grand experimenters next time to ignite asset price inflation early on in any incipient economic upturn might lead to their dismissal (if not effected earlier!).
First out of the gate among the Fed speakers today (before they go dark) is Dennis Lockhart (non-voter) commenting positively on the economy and jobs, shrugging off the recently terrible ISM data stating "I believe the economy is sustaining sufficient momentum to substantially achieve the committee's monetary policy objectives in an acceptable medium-term time horizon," but questioned inflation still running below mandate.
On the current path, the world is experiencing the largest artificial asset allocation in modern history, one that is driven by a misguided interest rate regime that has lost its efficacy and is producing more harm than good. Yet the fear of withdrawal pain is keeping central bankers from doing the inevitable: Quit. The response is predictable: "I need the drugs!"