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Fleeing Japan and A General Confidence Collapse

There’s always “flight to safety” (in advance?) out of Japan and it may be signaling something important is happening in the Pacific.  Meanwhile, confidence in the WEF is collapsing.

user profile picture davefairtex Jan 21, 2024
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Retail Sales (RSAFS): +0.55% m/m; new all time high.
Industrial Production (INDPRO): +0.05% m/m.  Not expanding, down slightly from the highs.
Fed Balance Sheet (WALCL): -13B (-0.17% w/w, -10.6% y/y). 22-month low.
Total Bank Credit (TOTBKCR): +30B (+0.18% w/w, +0.06% y/y).  Expansionary – and recovering.
10 Year  Treasury Yield (DGS10): +20 bp (4.16%); strong move higher.
30 Year Mortgage Rates (MORTGAGE30US); -6 bp (6.60%); well below high of 7.79% in Oct 2023.
Strategic Petroleum Reserve +596k (+0.18% w/w); slow refill again.

While industrial production is flat-to-falling, retail sales hit a new all time high.  We are buying more stuff, but we aren’t making it ourselves – and there was a smaller (but more “real time”) report (the “Empire State Manufacturing Index”, released on Tuesday) which came in dramatically lower than expected (-44 actual vs -5 expected).   This hints at bad industrial production for next month.  At least bank credit is expanding again, so the deflation/bank collapse outcome appears to be off the table, at least for right now.

The 10-year rate rose 20 bp, a good-sized move.  Related: TLT fell 2.5% on the week; long term bond funds fall when rates move higher.  This is a hit to every pension fund and bank holding long-dated treasury bonds. This week’s move was enough to pull DGS10 back across all 3 moving averages, the weekly rate-uptrend is strengthening, and the candle print was quite bullish, but the 10-year yield is not back in a monthly uptrend just yet.

Here’s one driver of rising rates: the Fed’s balance sheet as a percentage of GDP.  Fed holdings screamed higher back in 2008, and again in 2020 when the crisis-money-printing events took place.  More recently, QT started in March, 2022 and the Fed has continued to unwind money printing to the present day – mostly by selling Treasury bonds.

But there is an interesting little burp in the pandemic money-printing event: the “official pandemic start” date was March 2020, but money printing started six months earlier.  Event 201 was announced Aug 19, 2019, Fed money printing started September 6 (because banks weren’t lending in the Interbank market – so the Fed printed to cover the shortfall), and Event 201 was held on October 18, 2019.   I believe some part of the bankster-Oligarchy knew about “the pandemic”, and that’s why they stopped loaning money in the Interbank market in September.  I think Chris has mentioned this curiosity as well. …

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Top Comment

davefairtex:
Just parenthetically, I think Trump’s most-clever VP pick would be RFK Jr, since it would assure Trump would remain un-assassinated and un-impeached.

Great quote.
Anonymous Author by mike-from-jersey
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