With investors concerned about the recent gyrations in global stock markets, look at what is ripping higher.
Look At What Is Ripping Higher
May 26 (King World News) – Here is what Peter Boockvar wrote today as the world awaits the next round of monetary madness: The BoJ’s search for 2% inflation continues to be as fruitful as some looking for UFO’s. And if they ever find it, they might have other problems as inflation won’t just stop at 2%, it would head to more worrisome levels because of the circumstances needed to even get 2% inflation…
IMPORTANT:
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Headline CPI did rise .4% as expected y/o/y, twice the pace seen in March and which is actually just one tenth away from matching the highest level in two years. It was mostly all energy though as CPI ex food was higher by .3% and it was zero ex both food and energy. Now zero inflation is true price stability and that is what Japan has actually had since the bubble peak in the late 1980’s. In fact, since the Nikkei peaked in December 1989 at 38,916, headline CPI has averaged .4% y/o/y per year since then. Looking at inflation in May, Tokyo CPI ex food and energy was flat y/o/y. The Nikkei responded with a .6% drop and the yen is stronger. The 10 yr yield was little changed. Bottom line, searching for 2% inflation in Japan, let alone anywhere and calibrating a scorched earth monetary policy in order to get it, is losing all credibility.
For a 2nd day the yuan is ripping higher (I’m exaggerating but a .5% rise is a big move for it) because the Chinese seem to be getting tired of FX volatility. There is a story that the China FX Trade System is now telling banks that when fixing the daily yuan reference levels they will need to add a “counter cyclical factor” in determining the right price for the yuan. I did not see any details as to what these factors are and what would drive them but it’s clear what the intentions are. The CFETS said they want to reduce the “herd effects” of currency movements. What nonsense and a major step backwards in freely trading the Chinese currency. King World News note: Inflation and major currency volatility creates additional demand for physical gold. This helps put upward pressure on the price of gold like we are witnessing today. Also, KWN receives so many emails from its global readers and listeners about which high-quality mining companies they should invest in and as a result, today we have added another remarkable company to the list. This is one of the greatest gold opportunities in U.S. history and you can take a look at this remarkable company and listen to the just-released fantastic interview with the man who runs it by CLICKING HERE.
KWN has just released the remarkable KWN audio interview with Egon von Greyerz and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
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