See the latest Australian dollar analysis here:
DXY was down last night as EUR popped:
The Australian dollar caught the bid again:
As gold went wow:
WTI is pressing higher but Brent is stuck fast:
Metals MOAR:
Big miners were soft:
EMs stocks pushed for breakout:
With junk:
As US yields crumbled:
US stocks piled it on. Europe is crushed by EUR (hello ASX):
The only chart that matters kept on keeping on:
It is fair to say that the gold bid is also playing a part in AUD strength given it is 10% of the terms of trade. However, the AUD is not fully riding the gold bull. It more has it on a stretched leash:
Which boosts the case for local gold mining equities.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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Macro Afternoon
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Macro Morning
Wall Street continues to fall as earnings
Australian dollar poleaxed as DXY rips
DXY took off last night and EUR
David, what are the chances of a major insolvency crisis arriving in Q4, causing another huge leg down in markets including gold?
High.
Until then, Dance. Dance like you have never danced before.
We can dance, we can dance Everybody look at your hands We can dance, we can dance. 🤣
Ha ha great memories.
+1!
I took a few diggers/exploration co’s and juniors on small positions recently just for giggles basing my case on what happened in 2011, closed futures for now for profits and hoping there is a pullback on a chance of +ve real rates at some point causing a profit take. The only thing the markets (all markets) seem to give a st about is stimuli, and then when that ends, there’s the massive TGA to come ie, I don’t even know when a good time to exit is because it seems there will only be MOAR from who knows where after that – maybe the Fed, as there are still “tools” the Fed can use.
There are plenty of ‘tools’ at the Fed but few of them are useful for anything.
Ctrl +P ad infinitum. It will never end – you’ll be lucky to see it even pause.
Why would gold crash because of an insolvency wave?
That’s anti intuitive. An insolvency wave just ensures even more stimulus…. and more after that. Stimulus won’t end until a major inflation event overwhelms the economy.
If USD attracts safe haven bid.
An insolvency wave would (normally) be deflationary, lowering asset prices as the value of cash increases. A currency crisis at the same time as a wave of insolvencies would complicate things, and gold could be valued as a safe haven…
Added to which, it should be clear to anyone with a pulse that at the first sign of crisis the printers are cranked up to warp speed — it’s basically become a standard response these days. Gold can easily correct in such circumstances but it won’t crash 20%+. Ultimately it boils down to: what would you rather own – something that’s scarce and difficult to come by or something that can be created in unlimited quantities at the flick of a switch.
I would like that explained but it has happened.. gold drops into a crash. I can only explain it as perhaps people look to sell gold first to back stop losses on other contracts? I dont know why.
We saw it in the GFC and we saw it recently – gold crashed as leveraged players liquidated profitable positions to cover losses on other positions / raise liquidity – lasts about 5 minutes (metaphorically) then rallies again as the stimulus flows.
Margin call liquidations in other assets.
In which country? Maybe in the US, not Australia. I understand in Australia new insolvency laws extend the life of a dead company to six months, allowing them to spread their poor credit more widely through the system like a virus and remove the incentive for creditors to initiate wind up in a short time frame. What creditor in need of money has the time to wait 6 months to initiate wind up?
It’s retarded, agreed. Leading to a litany of unintended consequences – another piece of poor policy. Creditors get rooted instead and their businesses fail? Wtf.
When will it end???? *sobs tears into her porridge*
Australian housing doubles in value every 7-10 years. Silver doubles every 7-10 days*.
* past performance should not be taken as a guarantee of future performance.
I suspect you’ll need PMs to buy property soon. Nobody will want to trade for fiat.
The ratio has dropped below 80.
We should end up in a similar place to the US….small business jobs ( the great bulk ) topping out at 75% of pre-crisis levels
https://twitter.com/adam_tooze/status/1290603391861657600
This is before stimulus ran out…….Fed needs another $ 3 trillion to prop up the finance industry for a couple of more months and congress will grant it.
I’m sticking to my prediction that Trumpy is going to set up a massive crash in Sept/Oct and try to blame it on Biden as a Hail Mary to scare people to voting for him- saying its 100% due to the risk of Dems clean sweep. It’s the key demographics he needs that swung away from him that are most affected – suburbs, older voters, wh1te college degrees.
I figure that its not that he is credible but that information providers such as news channels are seen as having zero credibility. A message Trump repeats daily.
Man what Scott Adams says about different movies playing in the head is totally true.
I feel like Trump is going to crush it. Even a 59 state clean sweep is possible.
IF that happens, the REEEE will rival Crackatoa.