Macro Afternoon

See the latest Australian dollar analysis here:

Macro Afternoon

Stock markets are finally finding their feet here in here in Asia after a wobbly start to the trading week, with Japanese stocks advancing strongly after a big stall yesterday. The co-ordinated rise in commodity prices overnight has helped confidence, with gold surging to $1870USD per ounce, while cryptocurrencies flail about as Bitcoin struggles at the $45K level:

The Shanghai Composite is up slightly going into the close, now up 0.2% at 3522 points as it wants to extend past the 3500 point barrier, while the Hang Seng Index is also pushing higher, up more than 1% to 28535 points.  Japanese stocks are acting unsure again, this time jumping on a bid and pushing the  Nikkei 225 up a wild 2% to close above 28448 points as the USDJPY continues its mild pullback as Yen buyers maintain a push down towards the 109 handle:

The ASX200 did much better in today’s session with a near 0.7% gain, closing at 7068 points while the Australian dollar found some life with a small breakout above the 77.70 level but is still finding resistance here at the 78 handle from the previous weekly closes:

Eurostoxx and S&P futures are pushing higher, with the NASDAQ looking to open about 0.5% higher while the four hourly chart of the S&P500 showing price wanting to extend above its Friday night closing point:

The economic calendar ramps up tonight with UK unemployment data, EZ growth forecasts then US housing starts.

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Comments

  1. boomengineeringMEMBER

    .Confirmed ( anecdotally) of the todays MB posts.
    Also bought Rickards book ” The New Great Depression ” at the bullion dealers this morn. Anyone read it yet? Is it worth the read?

      • boomengineeringMEMBER

        Nah, read more slowly as always glean some knowledge from most unlikely sources due to differing views . Unless it was too boring or unrealistic then would discard after a quarter of the book.

  2. GavinMEMBER
    May 17, 2021 at 10:21 pm

    That’s a good thing, Government backed fiat is why we are in this mess.

    Gav … good grief how does one arrive at that conclusion, let alone state it, and then provide zero evidence to support it.

    Silly me … I thought it was the whole corporatist neoliberal agenda funded and advanced by the most wealthy to force[tm] a social – economic paradigm down everyone’s gob. Hence how banks and other C-corps operate is just a reflection of the aforementioned.

    • I’ll give you an example, if instead of buying Real Estate in 2019, I held onto my cash in a savings account, I’d be $200k down in terms of purchasing power. That’s how much houses in my area have gone up in value. This is all supported by Government. The destruction of purchasing power of my hard earned labour built up over many years.

      So tell me again oh wise 1, why FIAT isn’t a mess and why giving state control over your labour hours (converted to money/purchasing power) is a good thing? We used to get a return on our money that either kept or outpaced inflation, now we get shafted and told there is no inflation. No inflation in cheap trinkets perhaps, but Guy Debelle at the RBA says they don’t factor house prices in to inflation.

      But yeah tell me I’m wrong..

      • It doesn’t work that way for RE. Total repayments remain thereabouts linked to wages. Interest rates just determine how much principle vs interest.

      • Ronin8317MEMBER

        The problem is not control over fiat. The problem is the control over the definition of inflation.

      • oops, wrong place…
        Quite a few years ago I was talking with a bloke called Craig Wright about his doctoral dissertation on arcane IT security stuff. In the course of the conversation he dropped a bunch of cryptic hints about a new project and that I should look into it. Needless to say, if I’d been brighter and actually worked what he was banging on about I might have bunged a grand or so into his project when it went live. Sometime in 2017 I worked out that grand would’ve been “worth” something of the order of 48 mil, if I could cash out (unlikely in my estimation). This year with BTC at 40k ???
        The point of the above ramble is that I utterly fail to see how cashing out with a (hypothetical) gain like that could be considered as anything other than outright theft…

      • Labour hours doing what and then who said you were granted immutable labour tokens to start with. I mean productivity has gone up about 600% since the 60s yet wages and productivity diverged in the 70 and wages are below that adjusted today.

        How is government fiat the cause of all that, but yeah, your concerned about your personal hoard. Better yet we have about 5 more years of contending with covid before a new baseline can be established …. but yeah government fiat is the cause of all of humanities woes ….

        • Do you just start arguments for the sake of arguing? Inflation is a form of tax, when you earn a salary you get taxed, when you buy things you pay tax, when you sell some things you pay tax, then by stealth any money you manage to save is eroded in value by inflation.

          All sanctioned by Governments who think we should spend and buy mostly rubbish we don’t really need. I agree productivity gains have gone to the top 1%, but how do we fix that when those we elect are unwilling to fix legislation?

          BitCoin is anti establishment, it’s a way of moving your capital without Government getting in the way. That’s what I like about it.

          • SnappedUpSavvyMEMBER

            Your first question: yes it does 🤪

            your generation is definitely wiser then mine about this treachery

          • Your issue is due to a inaccurate view of money past and present and in case you missed it fiat is issued as a tax credit and not some store of value in perpetuity. Which again leads us back to your uninformed theory that its government fiat that has created all the problems going back from the mid 70s and not some wing nut ideology dressed up as science or economics.

            As far as inflation goes its basically too much money chasing too few goods and you can thank the anti tax fundies and libertarian minded economic breathers for enabling what you now decry.

            Groan …. crypto was sold as a means to avoid regulation and launder money ie. no rights and anything that inflates and deflates on a tweet is not a reliable near term store of anything. Shezzz I would have thought some would have learned after all the end times screeching post GFC, how many orders of magnitude wrong was that.

            TTW the fed has a mandate and congress the power to spend ie. what is confusing about decades of corporatism escapes you, but markets markets markets, EMH, IS-LM, Equilibrium[!!!!!], et al and now some are having a sad ….

      • SweeperMEMBER

        Asset prices are up because interest rates are down.
        Interest rates are down because governments are not repeat *not* creating enough money to generate inflation.
        Even Friedman admitted low interest rates are a sign of *tight* money not the other way round.

        • The Traveling Wilbur

          Exactly*. Why do others find this hard to follow?

          *Well, they are creating enough… just not giving it to anyone that’s likely to spend it would be the problem.

          • Correct, we have seen when the unwashed get money via the early Super release and the price of second hand cars last year. Amongst other goods. They create loads of money alright, they just give it to banks who aren’t lending it to productive business. Instead they channel it toward housing inflation in this country.

            Michael West has 2 or 3 videos about it on YT.

        • “Asset prices are up because interest rates are down.
          Interest rates are down because governments are not repeat *not* creating enough money to generate inflation.”

          Agree in spirit although technically, and as your first sentence points out, they are generating lots of inflation. It’s just asymmetrical and in the assets you speak of.

      • SweeperMEMBER

        And where would we be if bitcoin became the currency 5 years ago?
        In a hyper deflation with the price level spiraling to zero and everyone out of work.
        And interest rates would be even lower in that environment.

  3. The Traveling Wilbur

    To answer an earlier question:

    <b>Bold</b>
    is:
    &amp,#060,b&amp,#062,Bold&amp,#060,&amp,#047,b&amp,#062,
    (replacing commas with semicolons, obviously).

    Give a man a fish,
    and you’ll be hungry later.
    Must be going soft in my old age.

  4. Moving to the regions update after not quite 4 weeks. It is bl00dy awesome! I am so so so so so so happy. The house is great (ok it needs new carpet and curtains and the dishwasher appears to have carked it) but I am so in love with my home (though the fire wood storage system is so illogical it beggars belief). I have pruned my roses, though probably not as hard as I should have, and I have planted some bulbs as I have a real cottage garden. All my neighbours are welcoming, friendly and helpful. The nearest city is wonderful, I get into friendly conversations all the time with people I don’t know. I got a job way way way before I thought I would, as in I started work 2.5 weeks after moving day. I am now a horticultural worker, which is great cos I wanted to get away from customer facing work as I will be stuffed if I catch Covid once the borders reopen, so I’m setting up life for that eventuality. Everyone at work is an Aussie citizen on above award wages and my employers are very happy to work with my health constraints which is phenomenal. I still can’t believe I managed to do all of this and my weekly mortgage repayments are already nibbling at the principle. The Improvement in my quality of life and overall levels of satisfaction can not be overstated. I never want to go near a capital city again

    • That’s excellent, best thing i’ve read in weeks.
      ps go ham on your roses, they’ll be fine (not a rose expert but)

      • I just wanted to share some good news. Yeah I’ve figured out now what I should have done, but I’ve already spent a day and half pruning them (and some I did twice) so that’s it for this year. I’ll chop them back hard next year I think. With starting work so early (took the first job I was offered) I’m now back into survival mode and all the other stuff I wanted to get started on, like even finishing unpacking, has gone on the back burner, though I did manage to buy a washing machine and vacuum cleaner yesterday. But I have a job with great employers so even though it is hard physical work that is dirty I’m actually super happy. I’m doing work that so many people would turn their nose up at but whatever.

        • Although I was mean to Harry about it, working with plants will make you feel good.

    • Mining BoganMEMBER

      That’s an excellent result Poppy. Keep things simple and life be sweet.

    • Diogenes the CynicMEMBER

      Awesome news Pop – it is great to own your own place. You can now make those investments that only a homeowner can. Solar panels ahead of curtains and carpet? Or are there some nice boards underneath the carpet?

      • Curtains and carpet first, and I have the money for that. It will get tricky trying to figure out the question of double glazed windows or panels and a battery and do I have enough money for that?

        There are probably some really nice hardwood boards from the 60s but it gets cold here and I quite like carpet in the bedrooms and lounge room (lying in front of the fire on carpet is nice). There is lino in the kitchen that I know has replaced tiles, it would be nice if those tiles were still there, but that is a low priority atm. Once again, I’m such a happy camper.

      • The idea of driving though Melbourne to get to the olds is horrible. I like not having lots of people around. And the people that are here are nice, even in traffic.

        • boomengineeringMEMBER

          Your new life and job will go a long way into resolving the health issues. I’ll be surprised if you still it,/,any in a year or so.

          • Hehe lol I still don’t regret that but um yeah that was a different version of poppy 😄

            I’m all for personal evolution (though a significant part of my early childhood was in the country so maybe I’m going back to the roots I drifted too far from)
            Onwards (and hopefully upwards) onto new and different things. This change has been at least 6 years in the planning/strategizing/going for, 4 years in oz and my last 2 years in Beijing I just wanted out of a city and into the Aussie countryside. I finally managed it💪

    • Massive massive congrats – you backed yourself and it paid off. So many people go a long way through life before they realise what it is all about – living in a way that makes you happy which makes you a better person.

      • Thanks, I already feel so much more relaxed in an existential way and I have noticed that I’m a nicer, more charitable person in my outlook. It was amazing how that started to be a noticeable development about 2 weeks before settlement. I was beginning to get quite concerned about the horrible person I was evolving into as my non-home owner status seemed to be unchangeable. There’s a lotr to reflect on about what that means for wider society. Anyway the next goal is to invest my way into not requiring to work. I quite like the idea of doing about 10-15 hours paid employment a week, a lot of gardening and some volunteer work.

    • TailorTrashMEMBER

      Australia still exists …..
      ……diversity to the regions is still a dream ….enjoy

    • Know IdeaMEMBER

      Having made a similar move four years ago, I can only agree with your sentiments.

      • I honestly think with the right attitude many people could successfully make a similar move

    • adelaide_economistMEMBER

      Sounds like nirvana really. I figured something like that would require a move outside of any capital city. Hoping to do similar myself in a decade or so… fingers crossed.

      • Good luck! Obviously I tested this idea for quite a few years in my mind as I was getting my finances (and health) into an enabling position. I vacillated between Tassie and far east Gippsland for a long time before got I pulled west based on comparatively cheaper housing and what I considered to be more employment opportunities. Being able to do it by myself with a tiny mortgage and keeping other investments means that I’m not financially stressed, a benefit the magnitude of which I am certain I don’t fully comprehend. My advice would be to strategise and plan, but also don’t hesitate too long if you are ready emotionally and financially for it. I have not felt lonely, afraid, uncertain of my decisions, unsafe or even a smidgen of regret for a second since I have done this, and I moved to a region I had visited on a day trip once when I was 6 and where I knew no one and had no work lined up. Going to a region I hadn’t previously considered was the right thing to do (I only considered this region because far east Gippsland became too expensive and in the age of Covid need to travel by plane to see my parents became untenable). The right attitude can work wonders and taking a calculated risk where you de-risk as much as possible can work out (of course I got lucky with the house, it is structurally sound and very livable even without new curtains and carpet).

  5. SweeperMEMBER

    After a day of back and forth’s with the BitCranks, I have learned the following:

    1. EFTPOS is money
    2. Technology = Money
    3. Monetary Economics teaches that technology = money
    4. It is perfectly legal to tax people even if you are not the state
    5. Inflation is out of control. Central Bankers are all addicted to inflation (even though theyve all missed their targets for over 20 years)
    6. The money market is a partial equilibrium market. Prices are solely determined on the supply side – by what the CB does – and they always create too much money (see point 5)
    7. The best type of money is one which nobody uses as money.
    8. Gresham’s law is wrong.
    9. It is better to make money scarce and decentralised so it’s impossible to respond to money demand shocks and everyone lives in a permanent depression.

    .

    • The Traveling Wilbur

      That’s awesome news for 99.9% of the people in this country – especially all of Deliveroo’s new ’employees’.

      The only way this could have been better is if either party to the matter had been called “Vibe”.

      • The Traveling Wilbur

        It does now. Fckn.

        Actually one other thing that would make this better is if the Judge(s) [I haven’t read the judgement] were all crotchety oldies who’d never ordered food delivered via an app in their live(s). That would be even awesomer.

    • happy valleyMEMBER

      Thank goodness Straya at every level of gubmint has the best-in-the world gubmints and would never let anything as stupid as that happen?

    • Ta. It’s all about batteries. I don’t think my clunker(s) can last another 8 years though.

    • Ronin8317MEMBER

      It’s not the price of electric vehicle going down.

      It’s the price of petrol and diesel cars going up.

    • MathiasMEMBER

      If Solar was subsidised as much as the Oil industry, Im sure Labor wouldnt need to be cheap. Oil is clearly protecting itself.

      The entire Western System is based on keeping jobs going, even if that means protecting old industries and intentionally trying to prevent progress from happening.

      We had electric cars in the 1950s just Oil Companys managed to keep it under wraps. Thats 80 years of technological improvements which have been stifled because of a political system that protects dated views.

  6. MathiasMEMBER

    GBPUSD to 1.43300

    MB likes to Trade AUDUSD. For some reason, I find it AUDUSD to be downright aweful. Perhaps, I need to learn more.

    • All humans (and other animals too) hate change and will do anything to avoid it. But when the crunch comes, we are pretty good at it.