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The opening segment of NFTRH 212 did what an unbiased financial writer probably should not do and discussed politics. Then 24 pages of straight analysis followed.

Financial writers far and wide are weighing in on the US Presidential election result and its implications. So jumping into the ring, here are mine.

For the third cycle in a row I cast a protest vote. After voting for George Bush in 2000 (actually it was more a vote against Al Gore) I wrote in Ron Paul in 2004 and 2008. This year I voted for Gary Johnson, although I do not consider myself a Libertarian. I consider myself an independent who has long since been alienated from a two party system that looks a lot like dangerously competitive cartoons from opposite ends of a narrowly constructed ideological spectrum.

When you write a newsletter, you learn about being a newsletter writer; just like when you become a plumber, you learn a lot about plumbing. I once made an unfavorable public blog post about what I considered to be a cartoon that went by the name of Sarah Palin and was summarily served with an indignant email and subscription cancelation from an otherwise satisfied NFTRH subscriber. Lesson learned: There is little place for political commentary in financial analysis. Besides, political ideologues make really biased financial commentators; and in the markets bias just kills you. Continue reading "Post-Election Thoughts" →

The run up and aftermath to the FOMC’s QE announcement last month brought a surge of bullish optimism to market players – especially those in the over bought precious metals – that was unsustainable. Enter the predictable October fright fest that has seen big-name US earnings reports routinely punished and sentiment knocked down across the broad markets.  It should be clear to all by now that the US economy is decelerating.

Of course, one look at the Copper-Gold ratio tells that story well enough and has been telling that story since the spring time.  Gold is a counter-cyclical asset that benefits when policy makers are pressured to attempt to compromise their currencies in service to economic growth.  Copper is a cyclical commodity that goes in line with economic growth. Continue reading "Happy Halloween... Trick or October Pivot 2?" →

Using the spread between 30 year and 2 year US Treasury yields, we can gauge when policy makers are in control of market participants’ perceptions and when they are losing control to the free market’s will.

Operation Twist was announced in September of 2011 in the aftermath of the first phase of the Euro crisis as the yield curve had exploded higher, taking the monetary stress barometer, gold, with it.  Over bought on unbridled momentum, gold entered an extended correction in line with the yield curve, which complied with policy makers’ goal of calming down the system.  As shown many times in the past, gold and the 30-2 yield curve generally travel together. Continue reading "Systemic Stress is Building, and it’s Bullish (for now)" →