Goldtent TA Paradise

And we used to get excited about a $5 move

1. YYZ says:

   September 20, 2019 - 5:35 pm at 5:35 pm

   The floor will drop out (of PM’s) when the Fed and CB’s in general (re)establish confidence with markets that their policy goals are being achieved. Precisely what happened 2013-2016. So far 2019 that isn’t happening.

   Over the past few days demand for USD (via t-bill issuance) is outpacing supply by a few billion daily putting upward pressure on rates (buyers willing to ‘pay up’ for access to capital – possibly a sign of desperation?). Only the FED seems knows who those players are, but not us plebes (audit the Fed – are you kidding?). I think the Fed’s mission now is “Don’t Spook the (domestic) Herd” or at least before the next fix is in place.

   This is just my idea but I think that ‘buyer’ of dollars is Draghi and Co. – remember their recent (and less effective) ‘bazooka’ to save the system as recently as 9/12/19.

   https://fortune.com/2019/09/12/the-european-central-banks-bazooka-is-back-this-time-theres-less-of-a-bang/

   Does the trend in this graph look like it will suddenly reverse WITHOUT QE4?
   (image from ZH)
   https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/inline-images/FF%20vs%20reserves.jpg

   Market demand for dollars is putting pressure precisely opposite of the direction the Fed funds rate is being managed towards – thus the ‘losing control’ situation.

   Personally I don’t think the Fed will lose control however it will become clearer – where their market interests truly lie – stabilize rates to sustain/keep inflated domestic bank capital or push rates lower and print currency via T-ill issuance to save global markets (specifically the EU). Remember – the USD and EU currencies are ONE BLOCK (look at the near perfect -1 minute to minute relationship in the comparative FinFiz.com currency charts). I’d dare guess that the Fed is going to go full on to save the Euro supplying liquidity at progressively lower rates. The next financial crisis is likely going to be global, not domestic. And about tariffs, I think they only accelerate the inevitable toward ZIRP forcing the hand of the Fed in responding to the next crisis – Tariffs are a symptom not a cause of where CB policy leads (progressive devaluation of currency and the labor it takes to earn it).

   • YYZ says:

     September 20, 2019 - 5:41 pm at 5:41 pm

     sorry that’s FinViz.com.
     https://finviz.com/futures_charts.ashx?t=CURRENCIES&p=h1