On the heels of the Dow rallying, underneath the markets chaos is brewing as the U.S. dollar weakens and gold stabilizes.
Chaos Brewing As Dollar Weakens And Gold Stabilizes
August 21 (King World News) – Here is a portion of what Peter Boockvar wrote today as the world awaits the next round of monetary madness: While I don’t think the Fed will alter their path in light of Trump’s repeat of his view of where short term rates should be even though the real rate is still negative, I’ll repeat what I said the last time he made similar comments to Joe Kernen and CNBC a few months ago. Simply, if the inflation data dictates higher rates and the Fed instead buckles to political pressure and doesn’t respond, long term rates will tighten for them. Just ask Paul Volcker and his experience following Arthur Burns and G. William Miller. Or instead ask the Turkish central bank…
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Notwithstanding the comments, rates are rising this morning with the 10 yr up 2 bps after falling by 4 bps yesterday. The 2 yr yield, sensitive to expectations of Fed policy, is up 2 bps after falling 2 bps Monday. The dollar is what is going in the direction Trump wants it to, lower and gold in response is back to $1200 after touching $1167 in the intraday low last week.
About an hour and a half ago we got some comments from the PBOC likely in response to the Trump comments yesterday. They said:
“China won’t use yuan rate as tool in trade tensions” and that the “yuan exchange rates is decided by the market.” Lastly of note, they are “confident of keeping the yuan stable at equilibrium levels.”
‘Equilibrium levels’ of course is the unknown. The onshore yuan is higher while the offshore one is down a touch. Chinese stocks did bounce for a 2nd day overnight after 5 straight days of losses that had it at a 1 1/2 year low. Copper is rallying for a 4th straight day after 4 days of declines.
***KWN has now released the powerful audio interview where Gerald Celente gives a sneak peak look at the just-published Trends Journal and also discusses the recent smash in the gold and silver markets and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
ALSO JUST RELEASED: Gerald Celente – Just-Released Trends Journal Update On The Gold Market CLICK HERE TO READ
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