In an earlier Monitor, we alluded to a possible monetary reason for suspecting that the past year’s spectacular (and inflationary) bounce in Chinese revenues and earnings might have reached its high-water mark.
Here we take a more detailed look at the situation in the Middle Kingdom:-
[This article appeared in edited form in the Epoch Times and also in the Daily Telegraph]
In her recent set-piece testimony before Congress, Janet Yellen made clear that she is determined to repeat the sort of ‘gradualism’ in raising rates that proved so disastrous after the Tech bust. In other words, that she will not so much boil the frog slowly as encourage him to go out and make a further raft of foredoomed, highly-leveraged investment decisions before he realises he’s been cooked.
No, Mario is NOT about to give up – whatever! China monetary trends might mean the industrial earnings cycle has peaked. US debt levels are still OK, but the low cost is promoting slightly worrisome growth – nor are Tech balance sheets entirely without blemish. Commodities – clueless and friendless.
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Falling returns in the US. Tight money in China. An upswing in Japan. Deflation in India. Gold goes cold. Fretting the Fed on falling CPI and a flattening curve? No need to panic, just yet.
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The latest edition can be had here:-
Including a look at Japanese equities, the US dollar & sterling, the latest US data round, the significance of yield curves, and misconceptions about monetary ‘velocity’.
Courtesy of Cantillon Consulting
Please click the link for my latest thoughts, including a look at equity margin debt, the broad symmetry between today’s richest-ever & the 1980s’ cheapest bonds, the new natgas bulls, China, and gold. 17-05-29 M4 No 2
After a hiatus of several months, I have resumed publication of the newly-titled ‘Money, Macro & Markets Monitor‘ under the auspices of Cantillon Consulting.
Please click the link for a complimentary copy:- 17-05-25 M4 No 1
Reuters’ story that SAFE told its banks they should be as obstructive as possible in meeting customer demands for foreign currency, but should absolute not divulge the reason why, certainly succeeded in causing a stir in markets. Continue reading
I was recently flattered to be asked how I envisaged the dreaded ‘helicopter money’ working if it were not to simply add further to commercial banks’ already crippling mass of deadweight liabilities and assets, given that not only would printing it up in physical form be tortuous but that cash itself is only one conveniently heinous crime away from being proscribed altogether. Continue reading
Regular readers will know that the articles published here are but a small subset of the detailed work I undertake to analyse economic and political developments and their effects on markets. In order to give some idea of the scope of this, presented below is an archive of past issues of the Austrian School-informed, in-depth monthly publication, ‘Money, Macro & Markets’ in addition to which I compile twice monthly updates as the ‘Midweek Macro Musings’ which are also made available on a complimentary basis to subscribers to the former letter.