Gold Tops $1300 – Best Year Since 2010 As USD Tumbles Most In 14 Years

After tumbling in early December, gold has exploded higher since The Fed hiked rates on 12/13, hitting $1310 today – the highest since Oct 16th.
And as Gold has soared so the dollar index has collapsed…
Interestingly in the last month, Gold and Bitcoin have seen a wild ride – converging again today…
As Reuters reports, the dollar’s drop to three-month lows versus a basket of currencies on Friday lifted gold to its highest since mid October.
Putting the year’s relative performance in context…

This post was published at Zero Hedge on Fri, 12/29/2017 –.

A Wall Street Pro’s View On Bitcoin, Blockchain, & Bullion

Paul Brodsky explains the philosophy behind crypto investing…
Paul Brodsky is usually ahead of the curve. He traded options at the American Stock Exchange before they became mainstream, and then moved to mortgage-backed securities at Kidder Peabody in the 1980s.
After he figured out the flaws in the financial system, he became interested in gold – just before its bull run at the turn of the millennium.
Now he sees the next big opportunity, and he joined other seasoned Wall Street professionals at the first full-fledged cryptocurrency hedge fund Pantera Capital.
In this interview, Brodsky tells us how he came to see crypto as the next big thing, and what investors need to know to be successful in the space.
Epoch Times: Tell us more about your background in finance.
Paul Brodsky: What I’ve been attracted to has been where the most interesting aspect of finance was. Initially, when I got into the business it was options.
That ultimately got me into mortgage-backed securities which has a heavy option component.

This post was published at Zero Hedge on Fri, 12/29/2017 –.

Record-Smashing 2017 Ends With Stock Slamfest – Bitcoin, Bonds, Bullion Best

Ugly end…
But on the year, the dollar tanked (worst since 2003), stocks and bonds (the long-end) soared higher, commodities rebounded dramatically, cryptocurrencies exploded, and gold had its best year since 2010 as VIX saw its lowest average in history…
and all that driven by the biggest increase in central bank balance sheets since 2011… anyone else feel like this… (our estimate is we are at around the 30 second mark currently)

This post was published at Zero Hedge on Fri, 12/29/2017 –.

Central Banks Panic As Global Liquidity Premia Spike To 4 Year High

As is usually the case, there is a sudden and desperate scramble for liquidity to window-dress balance sheets and it has sent China 7-day repo-rates (the premium for locking in liquidity across the calendar new year) to 6.00% – the highest since year-end 2013.
Perhaps in response to this apparent crisis, The PBOC has also announced that banks will be allowed to use reserves at the central bank of up to two percentage points to meet liquidity needs during the February lunar new year celebrations.
China’s central bank is allowing temporary reserves use for 30 days to cover any liquidity needs.
Notably, at the same time, overnight Hong Kong Dollar HIBOR rates exploded higher…

This post was published at Zero Hedge on Thu, 12/28/2017.

Stocks and Precious Metals Charts – Lead Kindly Light

“Come senators, congressmen
Please heed the call
Don’t stand in the doorway
Don’t block up the hall
For he that gets hurt
Will be he who has stalled
There’s a battle outside and it is ragin’
It’ll soon shake your windows and rattle your walls
For the times they are a-changin’…
As the present now
Will later be past
The order is rapidly fadin’
And the first one now will later be last
For the times they are a-changin’.”
Bob Dylan, The Times They Are a-Changin’
“The only constant is change.”
Let me start out by saying that in my estimation, about 95% of short term predictions are worthless from an actionable trading standpoint. In most businesses, short term is less than one year.
That is why so many jokers on Wall Street keep so busy rigging the game, and cutting down their forecasting window to microseconds. It is the only way that they can provide consistent returns – they cheat.
Oh yea, I know that some guys have cobbled together some remarkable runs in the short term, and then generally flame out at some point. I had a run at the blackjack tables in Vegas that had the dealers talking. It seems like everyone gets at least one night like that, they are just flat out golden and can’t seem to lose at the turn of the cards.

This post was published at Jesses Crossroads Cafe on 28 DECEMBER 2017.

Stocks and Precious Metals Charts – Nativity

“American politics have rarely presented a more disheartening spectacle. The repellent and dangerous antics of Donald Trump are troubling enough, but so is the Democratic Party leadership’s failure to take in the significance of the 2016 election campaign. Bernie Sanders’s challenge to Hillary Clinton, combined with Trump’s triumph, revealed the breadth of popular anger at politics as usual – the blend of neoliberal domestic policy and interventionist foreign policy that constitutes consensus in Washington.
Neoliberals celebrate market utility as the sole criterion of worth; interventionists exalt military adventure abroad as a means of fighting evil in order to secure global progress. Both agendas have proved calamitous for most Americans.
Many registered their disaffection in 2016. Sanders is a social democrat and Trump a demagogic mountebank, but their campaigns underscored a widespread repudiation of the Washington consensus. For about a week after the election, pundits discussed the possibility of a more capacious Democratic strategy. It appeared that the party might learn something from Clinton’s defeat. Then everything changed.”
Jackson Lears, What We Don’t Talk About When We Talk About Russian Hacking, London Review of Books
Stocks wobbled sideways, sliding out stealthily on light volumes, into the new year.
Gold and silver managed to extend their rally off the NfP-FOMC short term bottom.

This post was published at Jesses Crossroads Cafe on 27 DECEMBER 2017.

Bitcoin In 2018: “There Will Be At Least 4 Crashes Of 40% Or More”

When you see something titled ‘Bitcoin 2018 Predictions’, you are probably most interested in just one thing: ‘Where will it go?’ So let’s start there, but then add some other observations on a variety of topics.
#1: We expect bitcoin will trade for between $6,470 and $21,600.
Here’s how we get there:
Bitcoin’s primary ‘real’ use case right now is personal asset protection. Yes, that includes money laundering and tax evasion. But it also incorporates the legitimate desire of honest people living in countries with less-than-exemplary rules of law to shield some of their assets. At the moment, the primary instrument used globally for these purposes is the $100 bill. Yes, the European Central Bank also issues high denomination notes. But the gold standard of paper currency is the American C-Note. (Oxymoron intended).

This post was published at Zero Hedge on Dec 27, 2017.

Growth Narrative Confirmed – Dr.Copper Soars To 3-Year High (There’s Just One Thing)

One thing is for sure, when Dr. Copper’s price is falling, the silence from prognosticators is deafening; but when it’s rising it is the greatest indication of the global growth narrative the world has ever known. However, there’s a hole in that story…
LME Copper prices are up for 9 straight days – the longest wining streak since 2004 – (and 13 of the last 14 days) pushing prcies above $7,200 intraday – the highest since 2014…
And given copper’s rip higher relative to gold, based on DoubleLine’s Jeff Gundlach’s favorite chart, 10Y yields should be drastically higher to reflect this implied growthiness…

This post was published at Zero Hedge on Dec 27, 2017.

The Rent Is Too Damn High: Record High 30% Of U.S. Adults Now Live With A Roommate

A staggering new analysis from Zillow highlights perfectly the unintended consequences of central banking policies that drive massive asset bubbles but minimal job/wage growth. According to the study, surging home prices and rising rents have now resulted in a record 30% of American adults, up from 21% in 2005, being forced take on roommates just to afford monthly rent payments.
As rent consumes a growing share of household income in many cities, some people must relocate or find ways to offset rising prices. An increasingly popular way to cut costs is by adding a roommate. Nationally, 30 percent of working-age adults – aged 23 to 65 – live in doubled-up households, up from a low of 21 percent in 2005 and 23 percent in 1990.
We define a doubled-up household as one in which at least two working-age, unmarried or un-partnered adults live together. For example, a 25-year-old son living with his middle-aged parents would constitute a doubled-up household, as would two 23-year-old roommates who are not partnered to each other. A doubled-up household contains people who might choose to live apart under different circumstances, financial or otherwise.

This post was published at Zero Hedge on Dec 26, 2017.

“Are Central Bankers About To Lose Control?” The WSJ Asks And Citi Answers

In an article published by the WSJ today, which was originally titled “Are Central Bankers About to Lose Control?” but after some shoulder taps was renamed to the far more neutral “Can Central Banks Keep Control of Interest Rates?” author Jon Sindreu looks at the current Goldilocks state of the market, in which global growth is “coordinated and widespread” yet inflation remains absent preventing central banks from hiking rates rapidly, resulting in “elated investors” who nonetheless are haunted by a question “will interest rates develop a mind of their own?”
The response to this question will also answer the overarching question posed by the WSJ: are central bankers about to lose control after nearly a decade of artificial vol suppression and asset inflation on the back of $15 trillion in excess liquidity. The goalseeked response that the WSJ is looking for, is also the result of a Blackrock report released last week titled “The real story behind low interest rates.”
For those who are too busy to bother with the semantic definitions of interest rates and their technical components, whether breakevens or term premia, ultimately the cost of money boils down to one thing: the inflation-adjusted opportunity cost of holding one asset relative to another. This is why the world’s central banks have been scrambling over each other to push rates as low as possible for the better part of the past decade to force investors into risky assets, or, as the WSJ puts it, “low inflation-indexed – or ‘real’ – rates push money into risky assets, because investors get little extra purchasing power for holding safer securities.” Here the WSJ references the BlackRock report which claims that “subdued real rates have been 2017’s main driver of returns in global infrastructure debt and investment-grade corporate debt. They also boost gold and real estate, analysts say, which don’t pay coupons but don’t lose value when inflation rises.”

This post was published at Zero Hedge on Dec 26, 2017.