In emails I received and discussions I saw and experienced there is a strong belief that independent measures of inflation (e.g. www.shadowstats.com, the Chapwood Index) are false and not trustworthy. I wanted to address this issue and show you how the rate of inflation is measured today - the CPI relied on by the most important institutions all over the world – historical background of it. Finally, I will compare different methods to find out which one is closer to the truth.
You should know the title as it comes from Nathaniel Rothschild, the father of central banking. It is true, that during turmoil most investors are scared for their assets and many assets plunge to very attractive levels.
The biggest central banks in the world are competing for being the best in destroying their respective currencies by printing. The process spans from Japan to Europe but in the US there is no official QE. Many observers talk about a very high possibility of returning to the printing press and this makes investors attracted to tangible assets. It is a very good option considering how low the price of most metals is today. Today we are at the level of 2009 bottom.
China is hiding capital outflows
Goldman Sachs discovered in what way the PBOC clerks hide capital flows outside China. Since October 2015 until June 2016, nearly 500 billion USD left China. To make the balance look good it was deleted from the PBOC’s statement on foreign currency transfers. When this was ont enough they also fabricated amounts wired.
Super La Nina is coming
Super El Nino is over. Unfortunately, the rate at which the temperature in the equatorial part of the Pacific Ocean rises, suggests that in 2017 we are going to see another anomaly called La Nina. I will spare the weather details and focus on the consequences for the world it can have. La Nina, if it comes (and the chances are high) will cause turbulences all over the globe.
In mid-July, there was an attempted coup in Turkey. After few days of the fight, president Erdogan regained control of the situation and media found other topics to focus on but what happened in Turkey has huge geopolitical weight.
The British referendum doubled the number of discussions about the future of the EU. The main reason is an inability of many to imagine the world without the EU. It resembles the situation from a few decades ago when no one could envisage and accept the possibility of a collapse of the USSR. There are other elements of our everyday life that, not long time ago people never heard of, and now average Joe would have problems picturing his live without.
The World is accelerating. It is clear especially when you look at the amount of bad news we are being fed. Markets react violently – we saw that during Brexit vote. Aside from more remarkable events, the rest is only the white noise of information which makes it harder, not easier, to invest. Despite tough circumstances of the market, there is still a possibility to find companies with healthy fundamentals and good perspectives for growth. Much easier it is to find firms hiding their own problems with accounting tricks.
- Deutsche Bank on the brink of bankruptcy
- War on Cash – a Piece of a bigger Puzzle?
- Global Structure of Ownership. Result of a 4 year long research
- Immigrants flooding Europe
- Trader21 - lecture presented at Fx Cuffs
- Are we waiting for another ‘2008’?
- Permanent portfolio models and their long-term ROI
- The Madness of the ECB
- Why Brexit is sending seismic quakes all over the world?
- The true reason behind armed conflicts
- How big is the inflation rate today?
- Buy when there is blood in the streets
- Agricultural commodities – it is time to start paying attention
- Independent Trader News – July 2016 part 3
- Independent Trader News July part 2
- Who is behind the coup in Turkey?
- Overgrown state as a guarantor of problems
- How accounting tricks distort the equity market
- 2016 superstars: Miners
- Independent Trader News - July 2016