Friday, November 6, 2015

Some Friday commentary

So I guess there must have been some sort of exciting news to make gold dump this morning at precisely 8:30 AM, eh? Not just bots cancelling long positions? Not just a whack of short interest hitting an illiquid market all at once to attempt to cave gold below $1100?

Oh well. As I keep saying, Goldman Sachs and international Jewry can keep paying Frik Els dozens of dollars to run negative articles on gold for all I care.

Anyway, here's some news, with more bitchy commentary than usual because I'm putting off studying:

Bespoke - Ford F-150 sales continue to rise. I guess nobody has a problem with aluminium trucks after all. But hey, you go ahead and keep selling the S&P 500, because reasons.

der Spargel - Merkel under fire as refugee crisis worsens. Gee, really? Germans are really so disorganized and incompetent that they're screwing up their refugee response? That's one hell of a blow to the German stereotype, eh?

Frik Els - hedge funds ready to dump 430 tons. My god! And Venezuela's going to dump 400 tons as they go bankrupt, and the Indians are going to stop buying 1000 tons a year supposedly! This is a perfect setup for gold to go to $900, Frik! You should tell Jeffrey Currie at Goldman Sachs, who has not in any way been paying you for these hit-pieces on gold!

Reuters India - Modi launches gold monetization scheme, response seen muted. Ask actual Indians and they'll tell you that a 2% return doesn't even pay for the substantial counterparty risk associated with Indian bank accounts, much less the currency risk, the tax risk, the cost of melting, or the loss of the jewelry premium. Not when a normal cash deposit pays 8%. But hey! Don't listen to me, listen to Frik Els.

Vox EU - welcome to the worldwide liquidity trap. Y'know, given the entirely plausible idea of a high upside limit to the reasonable total value of public infrastructure, and given this physical capital can be built at negative rates right now, maybe the ZLB is entirely the product of paleoconservative political ideology? I mean, if every country in the advanced world simply spent the trillions required to bring their infrastructure back up to a passing grade, wouldn't that be enough to push us off the ZLB, given that physical infrastructure is also a significant contributor to a nation's total factor productivity?

I mean, an alternative would be to improve labour's terms of trade; it would force firms to stop substituting cheap labour for capital and begin spending money on private capital to maintain productivity, while also improving private consumption as workers' wages increased. But I guess that's too socialist for most people, so why not just spend money on infrastructure? I mean, do paleoconservatives really hate roads so much? Are roads homosexual, or something?

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