SPY 2023 BS TALKjust going over the 2yr VS the fed rate and what to expect this year. I think I need to write down my speech first I tell you what talking to yourself is not that easy. Have a great weekend
Economy
US Purchasing PowerShort US purchasing power.
Long #gold, #silver and #oil.
1970s type of purchasing power destruction incoming?
EGGS "grade A large per dozen" daily"Remember, people will judge you by your actions, not your intentions. You may have a heart of gold, but so does a hard-boiled egg."
CPI & Inflation Rate USHello everyone! Let's take a look on what happened yesterday on the US financial market and understand the impact of CPI and inflation rate.
The Consumer Price Index (CPI) and inflation news from the United States can have a significant impact on financial markets and the value of the U.S. dollar. The CPI measures the change in the price of a basket of goods and services consumed by households, and inflation is the rate at which the general level of prices for goods and services is rising.
When the CPI and inflation numbers are higher than expected , it can indicate that the economy is growing, which can boost stock prices, lead to higher interest rates, and appreciate the dollar. This is because as the economy grows, companies will see increased demand for their products and services, which can lead to higher profits and stock prices. Higher interest rates can also attract more investors to bonds, which can lead to higher bond prices. Additionally, a strong economy can lead to increased demand for U.S. goods and services, and increased foreign investment in the U.S. economy. As a result, the demand for dollars increases, which can lead to an increase in the value of the dollar.
On the other hand, if the CPI and inflation numbers are lower than expected , it can indicate that the economy is slowing down , which can lead to lower stock prices, lower interest rates and depreciation of the dollar. This is because as the economy slows down, companies will see decreased demand for their products and services, which can lead to lower profits and stock prices. Lower interest rates can also lead to less investors in bonds, which can lead to lower bond prices. Additionally, a weak economy can lead to decreased demand for U.S. goods and services, and decreased foreign investment in the U.S. economy. As a result, the demand for dollars decreases, which can lead to a decrease in the value of the dollar.
It's important to note that the Federal Reserve uses inflation as an indicator to change the monetary policy, as they use interest rates as a tool to control inflation. Typically if inflation is too high, the Fed will increase interest rates to slow down the economy and curb inflation, and if inflation is too low, the Fed will decrease interest rates to stimulate the economy. These monetary policy decisions can also have an impact on the value of the dollar, as when the Fed raises interest rates, it can make the U.S. a more attractive place to invest, which can lead to an appreciation of the dollar. Conversely, when the Fed lowers interest rates, it can make the U.S. a less attractive place to invest, which can lead to a depreciation of the dollar.
A game of head and shoulders... Double top takes the throne The first head and shoulder hit exactly at its text book target before rebounding
The now formed INVERSE head and shoulder target would be 4,600 and give the market a chance to form a double top , scoop up all the liquidity from retail jumping back in and then take us down to depths that so far only the most degenerate bears even speak about
BTC should likely peak at around 29-33k during this rally before it begins a much harsher drop back to early 2020 price ranges
230112- Relation (1) interest rate, (2) Treasury Yield, (3) oil U.S. INTEREST RATES vs TREASURY YIELD vs OIL PRICE
Timeframe: 1 month. start: 1972
Blue line: interest rates (USINT)
Orange area: 10-year U.S. Treasury Bond Yield (IRLTLT01USM156N)
Green Line: oil (scale on the left)
(A) WHEN INTEREST RATES ARE ABOVE BOND YIELD,
(1) it sparks a financial crisis: 1990, 2000, 2008, 2019
(2) it is followed by a spike in oil price.
(3) on smaller timescale, oil price rises and falls with increases and decreases in Treasury Yields.
(B) OBSERVATIONS ON INTEREST RATE:
(1) Interest Rates have been falling since 1980
(2) Treasury Yields have been declining since 1980
(3) It appears, the Federal Reserves strives for a 5% interest rate. It drops interest rates FAST when the market is too hot, and builds up slowly again, attempting to meat the 5% arbitrary target.
(4) As time goes on the Federal Reserve is more cautious in raising interest rates.
BUT MOST RECENT RAISES IN INTEREST RATE ARE ALL BUT SLOW.
s3.tradingview.com
Inflation Data at 6.5% YOYInflation is cooling off big. My Expectation is that we hit 3% before summer and then start cutting rates from then on.
Dollar is getting sold off hard. Risk assets are in play!
U.S. Consumer Price Index's forecast, and there is no big changeThere is no major change in the figure, which is the same as the U.S. CPI YoY standard estimate.
The price stabilization section is entering because it has decreased compared to the previous month, but it is too early for the Fed to proceed with its policy pivot.
Inflation Report: 11 Jan 2023Finally there is a sense of relief.
The US inflation is just on a some-what downward spiral.
It's almost as if we peaked at a whopping 9.1% and now dropping to around 6%.
And let's not forget all our friends abroad, like Germany where it's dropped from 10. 4 in October down to 8.6%,
UK dropping from 11.1% slightly down to 10.7%,
Canada's 8.1 dropped to 6.8%,
France's steady 6.2%,
and China's decent1.6%.
And let's not forget our lekker country, South Africa where inflation has also dropped from 7.8% down to 7.4%.
It's just too bad all these numbers are due to supply chain issues, war, and food shortages.
But it looks like we have potentially seen the end of The Great Inflation - and now things should start to settle.
Your thoughts?
Trade well, live free
Timon
(Trader since 2003)
Next 24 Months M2 graphing doodleJust a doodle on the M2
Does the Debt Machine keep spinning upward stay tuned
You won't wanna miss What happens next
Inflation has peakedLooking for reversal in inflation, for now. May have another peak later but we should get temp relief. Once again, everyone and their mom talking about it...
OUTSTANDING DEBT as % OF GDP: Annual 2023 Re-cap, forecastThe United States Government Debt is estimated to have reached 137.20 percent of the country's Gross Domestic Product in 2021. source: Office of Management and Budget, The White House
Outstanding Sovereign Debt in the United States as a Percentage of GDP is a measure of a country's national debt in relation to its economic production. The significance of the United States' outstanding sovereign debt as a percentage of GDP in the global geo-economy is considerable, since the United States has one of the world's largest and most prominent economies. The stability and creditworthiness of the United States government has a direct influence on global financial markets and can affect other countries' capacity to acquire financing. Furthermore, the quantity of US sovereign debt can affect the value of the US dollar, which is the key reserve currency used by central banks worldwide.
It is computed by dividing the total outstanding sovereign debt by the GDP of the country.
This statistic is frequently used to examine a country's debt burden's sustainability, as a greater ratio might signal a higher chance of default. In the case of the United States, outstanding sovereign debt is the entire amount of money owed to creditors by the federal government, which includes both domestic and international holders of U.S. Treasury bonds.
As of 2021, the outstanding sovereign debt in the United States was roughly $22 trillion, or nearly 105% of GDP. This signifies that the federal government of the United States owes more money than the entire worth of goods and services produced in a particular year. The significance of the United States' outstanding sovereign debt as a percentage of GDP in the global geo-economy is considerable, since the United States has one of the world's largest and most prominent economies.
The stability and creditworthiness of the United States government has a direct influence on global financial markets and can affect other countries' capacity to acquire financing.
Furthermore, the quantity of US sovereign debt can affect the value of the US dollar , which is the key reserve currency used by central banks worldwide. Overall, US outstanding sovereign debt as a proportion of GDP is an important economic statistic that measures the US government's capacity to satisfy its financial obligations while maintaining worldwide trust.
US PMI : The one chart that says it ALLIt seems nearly all of the pieces to the puzzle is falling into place.
The ISM is the most important LEADING indicator and now ALL is in contraction. Even those who display certain optimism about the state of the economy should now be in doubt.
The sudden drop of the Non-Manufacturing PMI from 56.5 (November) to 49.6 (December) is certainly an indication of what is to come. This is certainly worrisome as 70% of the US economy is Services related.
Outside of the US, most major countries are already reporting the same contraction.
The FINAL piece to the jigsaw will be the one LAGGING indicator - the JOBS market. But there should be no doubt now that unemployment will soon rise.
And with inflation continue to fall, we shall soon see the Fed change course.
Good luck.
P/S : Do not just believe what I say. Use your common sense.
