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US home sales in modest rebound; Canada inflation up; Japan's PMIs stay weak; China faces rising flood threats; Australia faces massive deficits; UST 10yr yield at 0.60%; oil unchanged and gold jumps; NZ$1 = 66.6 USc; TWI-5 = 70.5

US home sales in modest rebound; Canada inflation up; Japan's PMIs stay weak; China faces rising flood threats; Australia faces massive deficits; UST 10yr yield at 0.60%; oil unchanged and gold jumps; NZ$1 = 66.6 USc; TWI-5 = 70.5

Here's our summary of key economic events overnight that affect New Zealand, with news geopolitical risks are now being added to pandemic, debt and deficit risks, and markets are still ignoring them all.

Firstly however, American existing home sales in June bounced back as expected, but not quite to the level anticipated. And the new level is still more than -10% lower than in the same month a year ago. Prices are up +3.5% over the same period but that is a flattening trend.

Canada's core inflation came in at a very modest +1.1% pa in June but that was higher than expected and higher than in May. Still, it is very much lower than the June 2019 CPI rise of +2.0%.

In Japan, their first report of factory PMIs in July shows them contracting at a slower rate (41.2) but that is still a very steep shrinkage. Their services sector is also contracting, also less than in June, but the July contraction (45.2) is very similar to the June one.

Taiwan's June unemployment rate fell from 4.2% to 4.0%. (China's jobless rate is 5.7%.)

In China, more heavy rain, and increasing nervousness about the ability of their artificial dams to take the strain. China has over 90,000 dams and a handful of small ones have already given way. A large one could cause a 'black swan' event.

And in the middle of this, there is rising concern Beijing may embark on an invasion of Taiwan. This just one of the rising geopolitical tensions at present, and markets are ignoring these risks.

They are also ignoring debt and deficit risks, something they have been doing for quite some time. In Australia, they are looking at a government revenue plunge, that when combined with their AU$164 bln in emergency pandemic spending support, will contribute to a budget deficit of around -AU$180 bln this year, or approaching -10% of 2020 GDP. The decline will be particularly tough in Victoria.

After making two attempts at posting gains, the S&P500 was flat on Wall Street in afternoon trade, but is ending with a +0.5% daily gain near the close and taking it to within 3% of its all-time pre-pandemic high. Overnight, European markets posted retreats of about -1%. Yesterday, Shanghai was the only gainer, up +0.4%, but Hong Kong sank a sharp -2.3% and Tokyo fell -0.6%. Yesterday, the ASX200 ended down -1.3% and the NZX50 took late losses to close -0.1% lower.

The latest compilation of COVID-19 data is here. The global tally is 15,016,000 and that is up +241,000 since this time yesterday. Global deaths reported now exceed 618,000 (+6,000).

A quarter of all reported cases globally are in the US, which is up +73,500 from this time yesterday to 4,062,900. US deaths now exceed 145,400 and a death rate of 439/mln (+3/mln). The number of active infections in the US is now up +37,000 in a day to 2,019,300.

In Australia, there have now been 12,896 cases reported, another +468 since this time yesterday, and still concentrated in Victoria but growing in NSW in Sydney's suburbs. Their death count is up to 128 (+2). Their recovery rate has slipped back further to 67%. There are now 4115 active cases in Australia (up +354 in a day). (The NSW chief health officer is estimating that ½ mln Australians may now have been infected, so community transmission is under reported and rampant.)

The UST 10yr yield has dipped by another -1 bp to now be under 0.60% and a new three month low. Their 2-10 curve is a little flatter at +44 bps. Their 1-5 curve is soft at +13 bps, and their 3m-10yr curve has dipped slightly to +50 bps. The Aussie Govt 10yr yield is unchanged at 0.87%. The China Govt 10yr is down -2 bps at 2.93%. The NZ Govt 10 yr yield is unchanged at 0.87%.

The gold price will start today sharply higher again, up +US$20 to US$1,863/oz. That drives the rise from the start of July to +US$95/oz or +5.4%. Silver is up +27% in the same period. Copper is up sharply too, up +9%.

Oil prices are soft but little-changed today. They are still just under US$42/bbl in the US and the international price is just over US$44/bbl.

And the Kiwi dollar will start today firmer again at 66.6 USc. Against the Australian dollar we are now at 93.3 AUc. Against the euro we unchanged at 57.6 euro cents. That means our TWI-5 is now at 70.5 and near the top of the recent range.

The bitcoin price is unchanged at US$9,373. The bitcoin rate is charted in the exchange rate set below.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

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The feared jumbo mortgage debacle is here — thanks to the coronavirus — and ready to pound the housing market


At least they purchase a home that looks like a million dollars compared to here many million dollar homes would look like a dog box in other countries.

No no its just that the market's in an Itsy Bitsy Gully right now, that's all.

Quite a stream of money entering nz via NZers who have returned from Australia and have been able to withdraw 10 or 20k from their Aus super under Covid hardship criteria.


So quite a steam of hardship affected (poor?) New Zealanders returning home to do what? $20k doesn't go far when you don't have a job and you have to cloth, feed and home yourself(s).
Don't tell me! Leverage it up and buy an investment property, right?!


I think that’s what he/she was implying sadly.

$20K will pay the rent for a while.


As long as you have other money to pay for everything else, sure.

If they downsize or move in with relatives it'll pay for expenses for a good while longer.

Level of unemployment will is a key indicator to watch out for.

Government and most experts have predicted that should not go up more than 9% by the the end of year so I guess has been adjusted in market sentiment but if it goes above 10% will be bad and each percentage above that will bring mayhem.

With no second wave, we may come out of it with less damage but if we have another wave than ........

I see Trump is closing China's embassy in Houston giving them 72 Hours Notice. The police ourside the building noticed small fires and as a consequence the smell of smoke.The staff were obviously burning confidential documents.

Could get ugly if the fire brigade over rules the embassy rights and they enter.

Good grief. Does anyone believe China has an embassy in Houston?

Was thinking more likely to help first home buyers actually. $20k + their dormant kiwisaver, + the 5k from govt FHB grant, + any other savings.
So another factor into the housing market.


so a grand total of 30k for a deposit with no stable employment?

I know a couple with good deposit and were hoping to get into their first home but one has lost job and other is on 80% so :

1 : May not get desired loan approval
2: Even if loan is approved are now themself reluctant to buy unless the partner gets a job.

At the same time, their are many whose jobs and earning are intact but outside factors specially unemployment isbound to have domino effect.

Anything and everything is possible going future. May be one must wait till election before commiting themselves unless this does not apply to people with deep pockets who can take the hit and survive.

You’re kidding right?! People apply for hardship super and then go load themselves up on debt (assuming a bank would be crazy enough to lend to them).

Pretty sure there is no real hardship criteria on the Aussie super withdrawl process, its simply open to all, so anyone that wants their money out of a locked in super plan is pulling the money out.

Nah, we don't need investment properties for all those young un's coming back. Let them live in an internet cafe like they do in Japan:

Actually if house prices continue to increase, that's probably what a lot of young people will be contemplating...


"Beijing may embark on an invasion of Taiwan" is a huge call for anyone, but it is an action that has been threatened by China many times. But the confluence of recent events may well mean that the CCP and PLA will consider this fruit being ripe for the picking. Recent reports that indicate that the PLA has largely closed the technological and numbers gap with the US also means the weight of argument is changing. The article indicates that China will wait for the two carriers to attain IOC, but that condition may not be known until after the fact.

In the meantime even making the call publicly is effectively a 'stand to arms' call for all nations in the region as the enemy is at the gates. Complacency, something our Government has been and is very guilty of, will not save us if China feels the need to act belligerently.


China has created war like situation not only in Taiwan but also in tiny peace loving country like Bhutan besides India and not to forget South China Sea and ready for USA. UK, Australia.

Threats are being send out by China in one form or other to most countries in the world invluding NZ but good on our PM to send a message that you can be a friend but not our Masters and our values of democracy and freedom of speech cannot be curbed so will have to listen to our views - like it or not.

China has been caught / exposed and will be now more dangerous as they believe in policy of Offence is the Best Firm of Diffence so a war is inevitable as No Dictatorgoes down without Fighting.


Our PM's comments remind me of those emanating from small nations adjacent Germany in the 1930's.


Correct but when even small countries like NZ and Bhutan (Tiny Nation) start to raise their voice is a sign that it is the begining of the end of dictator.


China could launch an invasion of New Zealand and be welcomed on the beaches by the education, farming, real estate lobby etc.


This is almost a historical statement.


Vote for National and will save China invading NZ as will be served on a platter for so called Rock Star Economy.

National and many in NZ believe in Chinesse Leader policy to their citizens that 'you gove us freedom and we will give you so called prosperity',

I see Trump is closing the Chinese Embassy in Houston giving Beijing 72 Hours Notice. The police were monitoring the situation from outside the building and noticed flames and smoke from the smell of paper. They were obviously burning controversial and confidential documents.

Chinese embassy in Houston is totally illogical.

It costs money to invade acountry. Probably less expensive to buy.

China has two friends - N Korea & Iran but is making very powerful global enemies around the S China sea, elsewhere and claiming Vladivostok should be Chinese will piss off Vladimir Putin. I think the war has already started with Cyber and Trade attacks and should the three gorges dam burst, with 400 million Chinese in its path I doubt Xi Jiping will have capacity to do anything other than try to save his fellow citizens from starvation. The Wuflu has already painted the CCP as a major enemy and simply refusing to trade or purchase Chinese made goods will emerge until the coming severe recession or depression takes hold and later on Nationalism will continue the same rejection of many things Chinese. The real war may become internal to China as their population realizes the cause of their misery.

repeat post from yesterday. If China couldn’t take Taiwan in the 1950’s it never will. The Straits of Formosa and surrounds, are treacherous, the seas and weather. Only two to three months window. Otherwise you are likely to encounter the divine wind of legend. Then read the history of the 2nd Marine Division and see just how easy a seaboard landing isn’t, even when the beach heads are only lightly defended. Can be no Pearl Harbour surprise with satellite surveillance globally and the island of Penghu on the approaches is fortified. All beaches are defended. Note Forbes articles years ago, underground storage tanks and piping. The sea can be set on fire. Airborne then? Even Hitler was aghast at the decimation of paratroopers at Crete. Ordered never to be used again. Transport aircraft are sitting ducks even if not at low altitude. Taiwan is built up, would descend into urban warfare, millions of civilian casualties. China is a land based army. It won’t be Taiwan but it might be South Korea. North Korea can be manipulated into starting a conflict. It is unfinished business. Strictly, it would not be illegal, Nth & Sth are only under a truce. China is very familiar with the peninsular. Precedent? North Vietnam unified Vietnam.

It's all about air power. Taiwan is within easy strike distance of Chinese mainland air bases and missile batteries. They need an effective nuclear deterrent if they want to be safe

No nation has ever been bombed into submission. has to be boots on the ground. heavy navy & air bombardments, of Saipan, Tarawa, Iwo Jima, Okinawa to name just a few did not much reduce the number of defenders, underground. Taiwan already retaliatory missiles capable of hitting major mainland cities. This would be no small quick campaign, it would a huge drawn out conflict with civilian losses in the millions given the density of population in the respective cities.

Japan was bombed into submission. Hiroshima and Nagasaki secured its surrender without any ally setting foot on the mainland.

Think it is well realised nowadays, if one nuke is deployed there will be a chain reaction a bit like that gunshot in Sarajevo.

Japan was already exploring options to surrender conditionally (the condition being the retention of the Emperor) via the Soviets as third party moderators - their thinking being that the Soviets wouldn't want the US to occupy Japan themselves.

When the Soviets declared war and easily swept aside the 700,000 strong Kwantung Army, the Japanese realised they had no hope of a negotiated surrender left and threw in the towel. So no boots on the ground in the Home Islands, but it wasn't bombing alone - 1.5 million Soviet troops, along with 5,000 tanks and tens of thousands of pieces of artillery, barrelling down the Korean Peninsular was definitely a factor in their decision.

The Emperor and his Armed Forces mates wanted to fight til the last citizen was dead. The Atomic bombs and the threat of more changed their minds, and saved a lot of lives.

The Kyujo incident. Hard line high ranking army officers attempted to kidnap Emperor Hirohito to prevent his broadcast of the acceptance of the unconditional surrender. The failure to get support from requisite regiments failed only because you do not manhandle a deity, and then saw the fanatics commit hari kari. No the Japan military was not ready to surrender. They were prepared to put every adult and child in harms way and have them die or be maimed, until the bitter end. Certain bloke in a bunker in Berlin in April 1945 held a similar philosophy.

All the United Nations would have to do if a war starts with China, is form a Dam Busters Team as China has thousands and thousands of Dams and recent times show how vulnerable they are to even a drop of rain in the 3 Gorges.....A few blasts would swamp much of China and spoil their water supply and flood the plains and Plane Aerodromes, if they cause friction, pour water on the masses. Would kill millions and millions.

That would be vetoed by China. Obvious really.

You don't say!, what just like all the previous times the so-called United Nations, had to be sidelined by those people who joined them before in fixing problems in their own neighbor hood..Like Russia and Ukraine...and Syria...and a host of others......that did not see Fit.

A bit like the Gangs in NZ who are avoided by Police, so they do not cause any Ructions.....and obviously could not fix a problem though a serious and desperate need. A mere 5 million citizens drink, drug ruled and thick in the head.....they cannot see the obvious...Really.

That would be just like voting in a Political team, who could not fix a Housing Problem, a Taxation Fix, they really screwed up. But took advantage of....Financially, just like the Drug Lords......a, so desirable. A Crap House and a Crack House...

Welcome to NZ.

What are you suggesting, is it a minority rule, by trouble makers....That would be appalling, especially after UN was created after World War 2, the War to end all that we would Never, Never have a War, ever, I repeat....Ever again.

Sitting by the way side is what is wrong with the World.....but thanks for pointing it out. ..A free get out of jail...Card.

Drink, Drugs, Slaughter, guns ablaze, murdering your own citizens and the female of the species.......Disappearing those who object, do not like your dominant way and harvesting bits and pieces of those they kill........

We must be proud to follow their Leader.......and Veto any idea of countering this and other murderous races, by a Single Vote.......

Thanks for pointing it out.......One Man, one vote.......Millions killed.........does that seem Right to you.......

I know I used the term United Nations........but that absurd bunch...ain't what I actually meant......

I meant a United group of do gooders joined against a Foe...not a Faux Party of the World will realise one day.......all talk, no what is the problem, I see occurring...and re-occurring.................Daily.

Sitting by and watching, does not a problem.......solve.

Nor does selling out ideals for ever and a day. Obvious Really......China "Banks" on it.....Poll-lies relish it. and we suffer the consequences...

United we stand, divided, we fall.....Obvious really......MMP... CCP.......UN, EU, UK.....USA....all disjointed....all ruled by .....I DEAL-ists.

Look I make no apology for being a realist but if the world should have reached that point, just as obviously a veto in the UN would be about as meaningful as a snowflake in hell.

Folks underestimate smaller Asian nations ability to defend themselves. Taiwan is no small fry and China has been successfull in how many military encounters?

You're right. Military might is often measured in size of the defence force numbers and often dictated by nations with larger population sizes.

However, what the world learnt from military confrontations such as the Yom Kippur War of 1973, the ability to defend one's own territory against enemy invasion is a completely different ball game; a game where military tactics, familiarity with terrain and technological superiority plays a much larger role than simply mobilising greater troop numbers.

Not to mention China's glaring lack of experience in military confrontation. Taiwan is in the same boat but defending one's own country has proven to be a far easier task than a successful invasion.

The managed to kill Indians on Indian territory using just clubs with nails in - so think what China could do with internet sabotage, co-ordinated flocks of drones carrying small bombs, etc.

Lapun - But no reliable reports of the number of Chinese killed and I think the brutality of butchering people with clubs sets a dangerous precedent and India will be no push over with a similar size of population to China.

the USA ordered there china consulate to close and the people to come home, if you are following what has happened to date it eerily is a carbon copy of the nazi's of the 1930,
start concertration camps for certain sections of their population whom they declare hostile, tick
take over a country that they claim is theirs install a puppet government and bring in laws to suppress the population , tick
last step demand back land they claim is rightfully theirs when they dont get it go to war


It would be a deluded, suicidal move.
Firstly, as others have noted Taiwan is challenging to invade.
Secondly, the USA would get involved.
Thirdly, it would be internationally condemned.

But...the current CCP regime seems both arrogant and deluded, so who knows.

What might be even more concerning is that US navy admirals are probably salivating at the thought of a conflict as they will be able to indulge in a spend up not seen since the 60s.

Complacency, something our Government has been and is very guilty of, will not save us if China feels the need to act belligerently.
Hmmmm...U.S. Claims Diplomatic Immunity For Covid-19 - Shuts Down Chinese Consulate

Yes I read another article that refers to Pompeo's statement regarding this. It was interesting as he implied there was evidence but did not disclose it. So - two possibilities; one the Trump administration is making it up and just looking for ways to smack China around which is a very dangerous game, or two; they've got evidence but can't reveal it because to do so would compromise their sources. This could men that the US has been 'naughty' and not respected the diplomatic status of the High Commission and used some form of passive intelligence collection, or they have penetrated the staff (Humint) and don't want the Chinese to realise this.

Always wise to subject US foreign policy objectives to scrutiny - New Kosovo Indictment Is A Reminder Of Bill Clinton's Serbian War Atrocities

According to your link America killed 1,500 people and fought for 8 months. The various civil wars when Yugoslavia broke up killed 140,000 people and lasted a decade. European countries stood on the sidelines demanding peace; allowing one side to inherit the Yugoslav army and the other side to fight with whatever it could scrounge since the European countries (especially my original home country the UK) prevented arms sales. The UN has declared some of activities in Bosnia as genocide. The Srebrenica massacre 8000 unarmed men and boys 25 years ago this month in an area that was an EU controlled UN safe zone being especially outrageous. There were also rape camps. It is making me emotional to write this comment and I remain deeply ashamed of being European. Any kid in a tough school could tell you that you either don't get involved or if you do get involved you do everything to win. Pious words combined with inaction encourages evil to triumph. So I remain pro-America on this issue; I just wish they had bombed years earlier.

China appears to be close to matching the F35, as an example. However, that's just matching the technology that the US has made public. The B2 Spirit was unveiled in 1988 and still looks like something from the future. I expect the US has plenty of secret tricks up their sleeve, not to mention the absolutely overwhelming carrier forces they can deploy.

China would be ruined if they invaded Taiwan.


of course it's possible, but I think unlikely, no matter how much sabre rattling we hear. History has shown time and time again just how difficult sea-borne invasions are. And exactly what would China get in return?

They could kidnap the Taiwanese govt and make them run the whole of China instead of the CCP. That would improve the economy and improve human rights.

Check your history. The Taiwanese government did literally used to run China, before Mao booted them out, but wasn't powerful enough to invade the outlying Chinese island of Formosa to finish them off. Also remember, when China is strong, Hong Kong, Tibet, and Taiwan are part of China. When China is weak, they are independent. Very simple.


NZD to USD now 66.666
Does that mean the apocalypse is coming

It’s the passive and deliberate demise of the current fiat monetary system by the elites from dirty cash to digital trash with Covid providing the perfect excuse. It’s all about surveillance and control. To get pigs to the slaughter you 1st have to get them in the pen. Crypto’s & PM’s are the only alternative for individual sovereignty that’s free from Government and Central Banks manipulation.

I see Trump is becoming more realistic with a changed view on both Covid and masks.
A case of simply having to accept the reality of both Covid and the implications for his reelection.

Yet still does not wear a mask at his daily briefing? China - Taiwain - I think unlikely as the PPL army are busy shoring up major dams across China. It will only take a few more weeks of rain for a catastrophe to unfold.

Maybe those surrounding him are secretly hoping he'll be infected and Pence can take over.

The floods are part of the plan.
Build a stockpile of water on mainland China, blow all the same in a systematic way so the resulting floods reach the coast at the same time. Thus raising the water levels around Taiwan flooding it to death.
It's fact and we know it.

Pin a tail on that plan and call it a weasel!

Disappointing that our media trying but failing to demonstrate they are actual news media have not picked up on a situation re China's dams that has been building for weeks, perhaps they will release the results of the last election before 20/9/2020.

Africa now too having doubts on Chinesse money :

Re: "there is rising concern Beijing may embark on an invasion of Taiwan"
The making of a perfect storm - Covid, a"Poland", and an unpredictable Trump.
If it comes about, it will be pretty rough and we won't be getting out of it unscathed.

Not a great to attack when your dams are at breaking point..
China sends a million troups, Taiwan sends one bomber. The troups are needed back in China.

I do think that modern day warfare has moved on from the "Dam Busters"!

However, sadly it increasingly looks like we are moving from the economic war to the hot war phase of the end of empire cycle (read Ray Dalio). More likely to be proxy wars than head on superpower confrontation though.

It wouldn't be unlike the States to add pressure to China with a bit of dam sabotage.

No chance. Too much chance of being spotted, and US govt would never countenance something that would kill 100's of thousands - that's a secret that could never be kept and would be fairly interpreted as a casus belli.

Like they claimed falsely of chemical weapons that they started one war over killing more than a million.
The States have zero qualms about doing anything they deam necessary in their own interests and then paint it with PR false news and string it out over years untill no one actually cares anymore.

It's true they've done it before. I don't think they'd get away with it again though, they blew so much credibility with Iraq (unless you're an absolute idiot like Tony Blair).

I think any sabotage of the three gorges dam was done during construction - check out the You tube video of its build.

China isn't daft enough to touch Taiwan. It would be the end of the CCP. Despite all the bluster, their armed forces are laughable compared to the USA.

Trumps re-election policy, start standoff/conflict with China. Promote Biden as weak , Trump the strong man only one capable of doing the job.

Bitcoin might have the best thing that ever happened to gold and we're possibly seeing a change in how people view the precious metal in light of the insane money printing happening.

What the gold sector has needed for years is generalist interest in the space, and one demographic in particular that has shied away from the sector is now showing unprecedented interest, according to Lobo Tiggre, principal analyst of the Independent Speculator.

“Young people today understand that there is a risk in calling something money that governments can create at will at no cost. That’s completely different than anything we’ve seen before,” Tiggre told Kitco News, noting that there has been a surge of trading activity on Robinhood, the web-based discount brokerage, in gold-backed exchange traded funds.

What I have been anticipating re gold/silver I suspect is now underway - that being it's the next big play that everybody decides ya just gotta be in...and away she goes. Boom.

Can’t think of a better way to give government and banks the one finger salute by being fully diversified in gold and silver.

Just gotta be careful that those ETFs are indeed backed by physical. Personally prefer to be able to touch my PMs.

We just endured one of the more ignorant RNZ pieces of 'journalism' ever.

Ryan on a Tarras airport proposal. No mention of what long-haul flight requires, or how long it will continue. This is a classic case of a false impression being left via avoidance (probably in turn resting on ignorance and/or belief). And no challenging of yet-another projection of growth-to-date, indefinitely forward. then we will be in solar powered airplanes that will follow the sun, built from high tech light weigh plastic made from tea leaves. A guy on twitter knows all about it.

where do I buy the shares, they accept the other fantasy BTC.

Ha ..still playing your drum re BTC ...keep playing, when are you going to admit defeat?

..struck a nerve perhaps? Defeat from what? How btc even got on to the morning news is beyond me. You go for it, but I hope others take time to check out the lies and con men behind it.

Lies and conmen? Just shows you don't have a clue about BTC. Why would add it to daily exchange rates if they think its a fraud.
Can you back up any of your allegations or give me a name of the con men involved in BTC?

I have yet to set it up...please do not be impatient.....You will be the first of many...I assure you. 100% guaranteed. return... I will only take Notes and Gold Frankinsense and Mer. (On second is a Ponzi) will take what I am given.

Cheers AndrewJ.

Thanks a bunch. A Novel Idea....never been done before....(or has it).

We could build them out of unobtainium and run them on hopium.

International flight will get cheaper, faster and less energy intensive as it shifts to hydrogen fuel cell power over next 20 years. Qatar is generating PV electricity for US$0.016/kWh. That is the equivalent of $27 for the same energy as a barrel of oil (though electricity is far higher quality energy) and is cheap enough to make liquid hydrogen or liquid methane that can compete on price with current Jet-A1 powered aviation. And in next 10-15 years smaller autonomous glider-like (longer wing span) fuel cell powered passenger aircraft can halve the energy consumption per passenger km of current jets.

Electricity is not an energy source and you need a lot of natural gas (fossil fuel) to make hydrogen.

$45million for 750 hectares. This is semi desert sheeprun country. The shareholders in Chch airport company should be asking about where their divvy money has been thrown away to. The people who pay fees and rents to Chch airport company have just found out they have been overcharged by $45million over the last few years.

Unprecedented Recession Synchronization and What it Means

Over 90% of the world’s economies are contracting. The present global recession has no precedent in terms of synchronization.

A major slump in world trade volume is taking place.

Additional debt incurred by all countries, and many private entities, to mitigate the worst consequences of the pandemic, while humane,politically popular and in many cases essential, has moved debt to GDP ratios to uncharted territory. This insures that a persistent misallocation of resources will be reinforced, constraining growth as productive resources needed for sustained growth will be unavailable.

2020 global per capita GDP is in the process of registering one of the largest yearly declines in the last century and a half and the largest decline since 1945. The lasting destruction of wealth and income will take time to repair.

What’s driving gold right now is the same thing which has rendered the Fed’s proposed yield caps stupid. The demand for safe, liquid instruments continues because, again, the opposite of inflation remains the operative condition just as it had been going all the way back to October 2018 (and before).

Powell would be better served ditching his flirtation with yield caps buying Treasuries and instead proposing to impose them on gold by selling (paper) bullion. Then again, he doesn’t actually need a gold cap because right now everyone is spinning higher gold just the way he wants them to.

As always, money-less monetary policy comes down to ridiculous, easily disproved deception. Other than that, there’s nothing else in the official central banker toolkit. Realizing this, you might then understand exactly why gold and bonds are being bid concurrently in this way. Link


"ignoring all risks "

Anyone with an historical interest is the ebb and flow of things should take a look of what happened between 1928 and 1933 during the depression .

The trend down was not linear, markets actually rebounded and everyone thought it was happy days , until it fell again.

Right now , anyone ignoring all risks , is simply gambling .

Yup, 6 rallies ("we're ok now, the new bull market has started") and 7 plunges, from 1929 top to 1932 bottom (-90%):

Transpower is moving to accelerate the Clutha-Upper Waitaki Lines Project upgrades, as a consequence of the Tiwai notice to scarper. Note that this involves duplexing the Roxburgh-Livingstone section. Planning for the inevitable.

Days to the General Election: 26
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