Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

North of Cairns 2017: Photo by Chris Becker

Stock markets are quite mixed throughout Asia, although the local market is surging again, with further COVID cases in Japan partiuclarly weighing. Bitcoin gained and lost nearly $1000 in “value” in the last couple of hours while gold remains under pressure as its still unable to get back up to the $1900USD per ounce resistance level:

The Shanghai Composite was up throughout the day but has fallen going into the close, currently up only 0.1% to 3343 points while in Hong Kong the Hang Seng Index is putting in another scratch session, up only 0.15% to 26453 points. Japanese stock markets are finally retracing with the Nikkei 225 falling back 1.1% to 26004 points while the USDJPY pair is continuing its own retracement, now dicing with the 104 handle having lost almost all of last week’s move higher:

The ASX200 was the best in the region, gaining more than 0.5% to close at 6531 points while the Australian dollar is maintaining a relatively stable position here just below the 73 level, arresting most of last night’s slip:

Eurostoxx and S&P futures are again lacking momentum as seen on the four hourly chart of the S&P500, still showing price wanting to exceed the October highs which are acting as strong resistance:

The economic calendar includes the Euro-wide core inflation print plus US housing starts and a few Federal Reserve speeches (probably a lot about not wanting to go back to the gold standard….)

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Comments

          • Agree in part mig, disagree with that which enables life aspect.

            Amendment … Mesoamerica society found out the hard way after advances in Ag and trade/markets the fallacy of making plaster a Veblen good.

          • Plaster? Pffffft. The Spanish threw out all their money – cocoa seeds – when they raided a ship because they thought it was rabbit droppings.

            Intrinsic value…. It comes from obligation under threat…

          • You high today mig …

            Firstly the Spanish sought gold to fight wars of dominion, the conquistadors were largely men without prospects from the rural areas that fought for spoils to send back home [incentives] and at the end of the day one treasure fleet sank and that was the demise of the Spanish empire.

            Were right back to ideology and mythology superseding anthropology and history like your issues with the salting of Carthage.

          • Pfft – 15th century Spain discovered a printing press. All that gold in south america led to massive asset price inflation in madrid.

            https://www.economicshelp.org/blog/7785/concepts/what-happened-to-the-spanish-gold-from-the-incas/

            “Economist Earl Hamilton argues that prices in Spain rose 300 percent between 1500 and 1600. Part of this reason was the rapid increase in money (then silver and gold) chasing a fixed amount of goods. The consequence was that Spanish exports became uncompetitive in Europe. Instead, the wealthy Spanish imported goods from abroad.”

          • “Baron believes the fact that Maya kings collected cacao and woven cloth as tax shows that both had become a currency at this point. “They are collecting way more cacao than the palace actually consumes,” she says, adding that the surplus was probably used to pay palace workers or to buy things at the marketplace.”

            Anon is also correct.

            If you don’t like” too much money chasing too few goods “, how about circulation far outpacing production?

            Ask Sweeper about the production function

          • Lmmao all currency hard or soft is dependent on the force of the state and the condition of its trading parameters aka there is no such animal as permanence.

            FFS mate gold historically has been all over the shop when floated and is the axiom that underpins the whole boom and bush dynamic.

          • Yeah but you can hide gold in your backyard or elsewhere and it probably won’t deflate. Where as you bury fiat in the backyard and a central banker can hit the print button and destroy it’s purchasing power on a whim.

          • If you stick currency in the backyard an inflation targeting central banker can only depreciate it at 2% p/y.
            Which is not a bad deal for the hoarder – especially when no central banker can reach the 2% target anyway.

            If you bury gold in the backyard it may depreciate by significantly more than 2% or a lot more say in the case of asteroid mining.

          • FUDINTHENUDMEMBER

            Also actual gold (like not yer ETFs) can be and has been used as a currency in times of societal chaos (see Aceh after tsunami) where fiat systems became ineffective. Whether it’ll protect your fancy stock “portfolio” is another thing. Probably having yer gun licence and associated paraphernalia would yield higher REAL returns in most scenarios where the P0O hits the fan.

          • Deflate to a basket of what other assets or commodities in a trading/exchange long run … ffs Cambridge Controversy.

          • Sweep, after John Law’s hyperinflation in France in the late 18th century and Weimar hyperinflation in the 20th century you should know better, but I guess, if you ignore history altogether AND embrace the fiction that is CPI (and ‘inflation targeting’), then yes, you may be correct. Don’t ever let the facts get in the way of your ideological beliefs, I say … 😉

          • Or rather than extreme far fetched examples we could look at the past 30 years where it was 28 years ago that the Fed’s core PCE actually hit 2 1/2 %.
            Burying money in the backyard hasn’t been a bad investment, especially post 08.

        • “What truth, what that lots of money is a vote in a binary trade … wtf …”

          The US Dollar has lost 96% of it’s value (measured against gold) since 1971. Literally, what don’t you get here? An IQ of 80 is all that’s required.

          • The Traveling Wilbur

            This is a site where the correct meaning (relatively which is bigger than the other) for the use of the greater-than symbol has been argued. Sincerely and at length as to which end the bigger of the two values goes at. Seriously.

            So I wouldn’t go around blithely assuming levels of reading comprehension if I were you.

      • The Traveling Wilbur

        Apparently it is the only practical option. Apparently. As Aus doesn’t have sufficient standalone facilities to make quarantining everyone coming into Aus practical [Edit: I mean in government owned facilities]. Apparently.

        Courtesy of multiple ABC talking heads a couple of days ago (before SA blew up). Lefty, but credible.

        Apparently an Army of tents never occurred to them.

        I didn’t say the talking heads were smart.
        Essentially, it’s another way for Scomo to break state border control. And they were dumb enough to sign up to moar of it via increased arrivals.

        INTERNATIONAL ARRIVALS SHOULD BE QUARANTINED BY DEDICATED FEDERAL RESOURCES. It is literally not that hard.

      • “I’ve tried to compose several responses to you Dom but just can’t get the wording right. I’ll just settle with this – I think you’re an idiot and I don’t like you.”

        I can’t think of a single intelligent thing you’ve said. I feel sorry for you. You have a chip on your shoulder the size of the Harbour Bridge. Grow up.

        • If you couldn’t be bothered responding last night while you were spam posting this thread with your endless dribble you probably shouldn’t do it 12 hours later. I stand by statements.

          Why do I have to say anything intelligent, I’m not here to prove I know everything but geez you and totes and some others sure seem to think that’s what this is about.

          I stumbled upon MB after last fed election while drowning my sorrows, saw opinions I liked and even some I didn’t understand. Decided to stick around and be another dribbler and maybe learn something about economics. So far I’m starting to learn you know bugger all about economics and just parrot others. You also pontificate on subjects you have a cursory understanding of and I also think you just make a whole lot of stuff up. Whatever, as I said, I think you’re and idiot and I don’t like you.

          • Okay, so you don’t like people who have alternative views to your own. You could just A) ignore these views or B) say “I disagree and here’s why”. That would be the reasonable thing to do.

            I live by the adage: I don’t agree with what you say but I shall defend to the death your right to say it. Therefore, launching vitriolic attacks on people whose views you don’t agree with is bad form, IMO, but it’s your choice at the end of the day. I’m a Member here because I agree with the majority of MBs positions on various issues but I have my differences on some others and am always honest and open about these, with the full knowledge that there will be pushback from various people. And again, I have no issues if they see things differently. Debate is healthy, perpetual consensus is not.

          • The Traveling Wilbur

            Ohhhhhhh… someone just used the ‘M’ word. Thought you had to be ‘of the street’ to do that?

            Subscriptionalist! 😁

            (Wall Street)

  1. “”China is angry. If you make China the enemy, China will be the enemy,” a Chinese government official said in a briefing with a reporter in Canberra on Tuesday.”

    China targetting us because we’re predominantly white imo. Other countries in Asia have called us white trash before. China have said they’d turn us into poor white trash. All of this racially motivated. Scares me what the Hans will do if they feel as though they are militarily unchallenged in the Pacific.

    • Remind me again of the machinations of the Honourable East India Company (HEIC) et al and how that might shape perspectives, not that some try to ring fence others that refuse to be shackled again, then again the whole central – south America example is pertinent …. see Brazil today.

      • What’s that got to do with Australia? We were part of a coalition in Vietnam I suppose, but China have invaded and occupied Vietnam several times over the past couple thousand years.

        China meanwhile threatens to invade the free democratic sovereign nation of Taiwan and crush the bones of anyone that stands in the way of their invasion.

        Let’s not forget the crimes against humanity committed on each other by Japanese, Koreans and Chinese. What’s Australia ever done to the Chinese? Sell them baby formula, wine and iron ore?

        No, they’re targetting us because we are white.

        • ErmingtonPlumbingMEMBER

          China invaded Vietnam not long after the US pulled out.

          “The Sino-Vietnamese War (Vietnamese: Chiến tranh biên giới Việt-Trung; Chinese: 中越战争; pinyin: Zhōng-Yuè Zhànzhēng) was a border war fought between the People’s Republic of China and the Socialist Republic of Vietnam in early 1979. China launched an offensive in response to Vietnam’s invasion and occupation of Cambodia in 1978 (which ended the rule of the Chinese-backed Khmer Rouge).”

          Chinese backed Khmer Rouge says it all really.

          Wonder if the Russians are gunna end up being on our side?
          Their Nuks sure would come in handy.
          Maybe we can buy some of them Russian Mobil middle launchers. More practical than an at sea presence with our sparkly populated interior.

          “ Chinese forces entered northern Vietnam and captured several cities near the border. On March 6, 1979, China declared that the gate to Hanoi was open and that their punitive mission had been achieved. Chinese troops then withdrew from Vietnam. Both China and Vietnam claimed victory in the last of the Indochina Wars. As Vietnamese troops remained in Cambodia until 1989, one can say that China remained unsuccessful in its goal of dissuading Vietnam from involvement in Cambodia. Following the dissolution of the Soviet Union in 1991, the Sino-Vietnamese border was finalized.

          Although unable to deter Vietnam from Cambodia, China succeeded in demonstrating that its Cold War communist and socialist adversary, the Soviet Union, was unable to protect its Vietnamese ally.[18] Following worsening relations between the Soviet Union and China as a result of the Sino-Soviet split of 1956–1966, as many as 1.5 million Chinese troops were stationed along the Sino-Soviet border[when?] in preparation for a full-scale war against the Soviets.”

          https://en.wikipedia.org/wiki/Sino-Vietnamese_War

          • FFS … watch McNamara’s mea culpa The Fog of War …

            Winner of the Academy Award for Best Documentary

            It is the story of America as seen through the eyes of the former Secretary of Defense, Robert S. McNamara. One of the most controversial and influential figures in world politics, he takes us on an insider’s view of the seminal events of the 20th Century. Why was this past Century the most destructive and deadly in all of human history? Are we doomed to repeat our mistakes? Are we free to make choices, or are we at the mercy of inexorable historical forces and ideologies?

            From the firebombing of 100,000 Japanese civilians in Tokyo in 1945 to the brink of nuclear catastrophe during the Cuban missile crisis to the devastating effects of the Vietnam War, The Fog of War examines the psychology and reasoning of the government decision-makers who send men to war. How were decisions made and for what reason? What can we learn from these historical events?

            As American forces occupy Iraq and the possibility of additional military conflict looms large, The Fog of War is essential viewing for anyone who wants to understand how the American government justifies the use of military force. Combining extraordinary archival footage, recreations, newly declassified White House recordings, and an original score by the Oscar nominated composer, Philip Glass, the film is a disquieting and powerful essay on war, rationality, and human nature.

            https://documentaryheaven.com/the-fog-of-war/

          • Do you even realize that the U.S. bought the war off the French to support MIC and then the French horded the gold from the exchange – ????

            You probably have no clue about during the civil war how the French sided with the south so as to throw a spanner in the English trade in cotton and how that would effect Manchester.

          • On top of that you had the upper bound inflation from the war that needed attention and due to the tax is theft meme [usual ideological noobs] then resulted in the Volcker treatment of labour and now they have 600ish billionaires running the show … gasp

          • Like Skippy, I embrace the concept of our new Han overlords. A bit of surveillance, a credit score and re-education never did anyone any harm.

          • boomengineeringMEMBER

            Hey Skip,
            what’s your knowledge of the delayed, (by two werks) acceptance of Japan’s WW2 surrender to allow the bomb to be dropped to show Russia it’s might.

          • ErmingtonPlumbingMEMBER

            The delay was connected to the Japs trying to negotiate a better deal than Unconditional surrender.

            The Soviets were very pissed of they didn’t get to Carve out a chunk of Japan like they did in eastern europe and Germany.
            Sure dropping the bomb was partly a demonstration of power but more importantly it was to wind up the war quickly before the Soviets could enter Japan.
            The soviets were so pissed of that they were still in a state of war with the japs until 1956!
            https://en.wikipedia.org/wiki/Soviet–Japanese_Joint_Declaration_of_1956
            Look how well Partition turned out for the Koreans!
            Still a shyte show!
            It should also be noted that US losses, during an invasion of Japan were projected to be well over 100,000 men
            49,000 casualties including 12,520 killed taking Okinawa alone

          • I agree from an A political historical advantage that Japan surrendered purely on the basis that the Russians at that time would have competently restructured their culture, hence the machinations of MacArthur in allowing the Emperor to stay on and some sweet deals to boot.

          • The VC kicked the French and then the Americans out of their country, and when the Chinese invaded they had their ar$es handed to them as well.

            The Vietnamese are actually tough. The Chinese are not. They talk a big talk but they haven’t won a fight since 1949. When they take on America, Japan, Australia etc, they will have initial successes, and then they’ll be smashed.

            Can anyone provide a list of Chinese allies (not clients like Iran) on the world stage?

          • Yep, LWS, the Chynese are ultimately isolated. Putin is no one’s fool. There is zero chance the Ruskies ally themselves with their belligerent neighbours in war.

      • ErmingtonPlumbingMEMBER

        300 years ago isn’t today Skip.
        You and all that “Wh!te trash” talk sounds to me like the way 1930s Germans talked about past Jewi$h transgressions and the way ALL of them were held responsible for All societal ills due to a perceived Jew!sh over representation and control of international finance and Banking.
        That was the grounds that lead to the holocaust.
        You happy to be part of that mate.

      • “… of the machinations of the Honourable East India Company (HEIC) et al and how that might shape perspectives,”

        A different era, Skip. Fcking irrelevant in the grand scheme of things. Back then, Britain ruled the world.

          • The less well off would be a lot better off in the long run being paid in gold rather than toilet paper that the central bank can produce at the drop of a hat, no? And in almost limitless quantities. You can’t print gold, buddy, and that’s what makes it valuable.

            What is it that you’re not grasping here?

  2. Sky News is now telling me that Steven Marshall is taking decisive action to get ahead of the virus through a stricter lockdown than Victoria to avoid becoming… Victoria, which had a less strict lockdown… but was too strict and long according to Sky News.

    • I am not sure we should be going ahead with the tennis in Jan. I can see Covid escaping very easily. And the news tonight about the state of our contact tracing upgrade does not engender confidence

      • Mining BoganMEMBER

        Cycling events in January have already been cancelled. I wouldn’t be surprised if the tennis gets a late scratching like the grand prix did. It would be a touch embarrassing if Roger succumbed to WuFlu.

        Hope vs The Virus 2. This time it’s deadly.

      • Goldstandard1MEMBER

        Hot weather is the difference so spread wouldn’t be as bad. However I go every year and my Mrs and I are a no show this year. It’s crowded enough normally but add social distancing and it will be a waste of time and money. no thanks

        • Goodness graciousness! Adults making their own mind up about the risk they’re willing to run — what is this world becoming!

          (We have turned into a nation of braindead sheep).

          • Goldstandard1MEMBER

            Jesus Dom, did you write this to the correct comment? I literally just said it should be on because it’s summer but we are choosing not to go. Where’s the confusion there?

        • “Jesus Dom, did you write this to the correct comment? I literally just said it should be on because it’s summer but we are choosing not to go. Where’s the confusion there?”

          I was actually robustly supporting your position but I see now that perhaps the tone could have been mistaken for sarcasm or criticism. Apologies!

          • Goldstandard1MEMBER

            All good, I see the context now.
            I just belief events should be run safely and put the power back to the people to behave. If they don’t, eject them.

  3. Goldstandard1MEMBER

    It’s like Schiff (who I rate) and Dent will be in the middle of their debate and then Jay Powell enters the zoom chat and says to them “hold my drink”.

    • You don’t need to worry about Powell – he’s already demonstrated he’s willing to go the whole mile with printing.

      There is precisely zero chance ‘he’ll save the dollar’ like Volcker did, because Volcker recognised he had a brief window of opportunity to do so i.e. when debt levels were particularly low.

  4. 1st Semester journalism (for 100 points)
    Anything bad which happens in the State of Victoria is:
    a) Dan’s fault
    b) Dan’s fault
    c) Dan’s fault
    d) All of the above.

    • It’s one thing when it’s random new members/guests, but to see regular members/non-payers still banging the #justtheflu and #onlylockdownoldies drum it is ludicrous after all we’ve seen in nearly a year of this virus. Complete denial of reality.

      Broad lockdowns aren’t perfect but fk me, nothing else works because humans are tarded.

      • +1. It’s the asymptomatic spread, people are used to responding to symptoms. But this thing is too quick and the only effective response is pre-emptive and broad brush, with no carve outs for the entitled oh I’m responsible crowd. The only positive is that SA are moving quite fast, learning from the VIC movie “Escape from Hotel Quarantine”, the negative is the bug appears to be faster than before also.

    • desmodromicMEMBER

      From inside the lockdown, it seems obvious that quarantine needs to be outside our major cities. With this virus any infection breach has huge consequences. Christmas Island or Howard Springs perhaps.

    • Gus has become seemingly (to himself) philosophical about Qld winning when they probably shouldn’t be winning. Johnsy, though, will be apoplectic … 🤣🤣🤣🤣🤣

  5. “But Trump has been a good President- he hasn’t’ started any wars anywhere”- Assclowns everywhere.

    No [email protected]# Sherlock! He’s been too busy working for the enemy, waging war on his own country. Now the puppeteers are pulling Trumpellina’s strings as hard as they can before he’s gone. Will his nutcase supporters still stand by for him when his country is fatally compromised? How about when the videos come out that show just what collateral the Russians had on him?

    • I will refer you to Asop’s fable of the tortoise and the hare. Difficult to predict the eventual winner. Better to hold both as a hedge against each other. Longterm Gold will likely win out. The Gold price should be much higher but all the derivatives and hypothecation is suppressing its price – a lot of the traded gold is just paper – once the S really HTF no one will want the paper and the physical gold price will moon.

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