Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. And it bears mention that most of these items are from the “tangibles heavy” contrarian perspective of SurvivalBlog’s Founder and Senior Editor, JWR. Today, we look at the price of gold, vis-a-vis the Hong Kong protests. (See the Precious Metals section.)
Precious Metals:
Gold Prices Plunge Right On Cue As China Golden Week Begins. JWR’s Comment: But watch gold soar, once the Chinese PLA and PAP crack down on the Hong Kong protestors. I predict that will get ugly there on a Tiananmen Square scale, sometime soon. I suspect that the PLA will probably wait until there is a major international distraction elsewhere, and then let slip their dogs of war.
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Hub Moolman: Silver and the Yield Curve Inversion
Economy & Finance:
At Wolf Street: Fed Admits Failure of ‘Plan A’ to Control Money Market Rates, Shifts Back to Repos (which was ‘Plan A’ till 2008)
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H.L. sent us this: Banks Just Changed the Rules of the Negative Rate Game for Danes. A pericope:
Denmark is about to become a test case for what happens when banks start charging a lot of customers to store their money.
That’s because one of the country’s biggest banking groups just changed the rules of the game, by removing the floodgate that had shielded most retail depositors. Until Friday, only people with roughly $1 million in surplus cash at their banks were facing a negative rate. Now, the threshold has been reduced to just over $100,000, with no guarantee it won’t go lower.
Other banks have hinted they’ll follow and economists say the development marks a major shift in how monetary policy will be felt across the economy.
Denmark’s latest response to negative interest rates has made it an even more interesting case study for the European Central Bank. Jan Storup Nielsen, a senior analyst at Nordea, reckons that many hitherto unknown consequences of negative rates will finally play out in the real world.
‘So far, it’s just been a lot of theories about what will happen, but now we get a chance to see it in real life,” Nielsen said. “For the rest of Europe and the ECB this is perfect, because they can let Denmark learn all the consequences and then see what they should decide.'”
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Repo Madness Day 8: NY Fed Pumps $110 Billion of Cash into Market