A couple of weeks ago I had the pleasure of recording a Financial Repression Authority (FRA) podcast–hosted by Richard Bonugli–with one of the world’s foremost Austrian economic analysts, Ronald-Peter Stoeferle. Mr. Stoeferle had just returned from a GOLD conference in China so he was bringing a fresh perspective on the global demand for precious metals. This podcast provides the view from Asia, a region from which we don’t receive enough information. Enjoy and I will return in full next week.
***As a follow-up to Sunday’s blog post, the DOLLAR has weakened since the Powell PIVOT empowered DOLLAR bears across a spectrum of currencies. On Tuesday it is important to note that the YEN has retraced the entire move from the night of the ASIAN flash crash. It is important for those trading futures to note that the flash crash took place when GLOBEX was refreshing from 4 p.m. to 5 p.m. CDT, so that the futures range was not as high as the cash YEN rate. If you are trading futures and wish to be long YEN it is important for the January 2 low of 9166 to hold. (Yen futures are currently trading 9241.) The EURO and SWISS have held their post-YEN rallies so DOLLAR bears are beginning to feel emboldened.
A side note: Fritz Zurbruegg was speaking Monday about Swiss National Bank policy. He maintained that the SNB is ready to sustain negative interest rates and is well prepared to intervene in foreign exchange markets. Zurbruegg maintained that the SNB‘s balance sheet is large but can grow further. This is the language that the SWISS used in 2015 just before it ended its sacrosanct EUR/CHF PEG of 1.20.
The issue of the strong Swiss at present is far different from January 2015 because four years ago the SWISS were tactically trying to sustain a PEG. This time the Swiss are not PEGGING the currency but merely performing ALCHEMY as they print unlimited amounts of Swiss francs and use them to purchase a massive basket of global equities. For example, they’re selling francs into the market and using the proceeds to buy stocks such as APPLE.
Of course everything the SNB does is in contravention of the G-20 agreements about foreign exchange intervention. I really like the LONG GOLD/SHORT SWISS play but the SNB jawboning has my attention. For the record, I told readers three weeks before the Swiss abandoned the peg that the 1.20 level was unsustainable. Several had the correct position on January 15, 2015 when the Swiss removed the peg. Again, current conditions aren’t the same since there is no PEG but beware that the Swiss are concerned about the most recent predicament.
Also, take a look at the comments on Sunday’s blog post as there’s a hearty discussion about the SNB, which is a publicly traded entity. Enjoy the podcast.