“To have a budget deficit of around 7%,
with a sub- 4% unemployment rate,
is just totally irresponsible.”
I love this data series: Average hourly earnings x Avg. Weekly hours adjusted for 'Urban Wage Earners' CPI.
The new BIG LIE is that worker incomes are keeping up with (the understated) CPI.
No.
"The latest data point is 5.5% below the 1972 peak."
The problem with the above it that it uses the intentionally-understated (at least since hedonics were introduced in the mid-1990’s) CPI model, so real real wages are actually lower.
Not talked about enough: Average Weekly Hours
Here’s my favorite deflationist, Jeff Snider:
“The entire economy is being forced into bargain hunting because it is not strong, it's not resilient, incomes have not kept up with price changes, incomes are not catching up to price changes ,and the situation in 2024 -contrary to all mainstream expectations - is actually worsening.”
Greg Weldon on who’s buying gold
“Since July of 2022 700 tons worth of gold was sold in the ETFs, coin sales were down for the first time since 2019 in the first quarter, in 2024 for the first quarter January through March. At the same time Swiss and UK Imports were down 14 of the last 18 months. Why is that important? It means the bullion banks aren't the ones buying gold. All right, so who's buying gold? The Chinese have been buying gold, bigtime. Big Time, all right? Gold imports a record in January, 225 tons. That's a lot of gold.
The PBOC - People's Bank of China - stopped reporting their gold buying, so now the numbers are kind of difficult to find, so we rely on some private estimates. One of the more respected estimates puts the gold purchases last year at 700 tons, where was it 725 tons for the year. Last year, total Central Bank purchases were 1,000 tons, so 75% of total Central Bank purchases were in China, and the last two years are the only time ever Central Bank purchases a gold were 1,000 tons within a year, so the Central Bank is really accumulating gold, big time in China. When you're talking about that kind of accumulation, 590 tons in 2022, 725 tons last year, 225 tons in January, means almost 1,600 tons of gold China's taken off the market in the last 28 months. That's an enormous amount of gold.”
In Gold We Trust
Ronald-Peter Stöferle & Mark J. Valek’s Latest
Congressman Ron Paul asking Citadel-Intern Ben Bernanke about gold, 2011
Below the fold, Louis-Vincent Gave - in excerpts from a typically great interview with Demetri Kofinas - warns that America’s actions are undermining our biggest competitive advantage - the dollar’s world reserve currency status. We’re playing with fire.
Gave is French, and gives a non-American perspective of things. As I’ve mentioned before, most Americans never try to put themselves in the shoes of those whose countries we bomb or otherwise interact with. Most Americans - including many of our “leaders” - seem completely oblivious that there are seven or eight billion people out there who may not see things the way a typical American does (Greg Weldon above explains this about gold - Americans are sellers as everyone else is buying.) This willful ignorance is dangerous.
Also, Nancy Lazar, “democratizing investing” (a term I loathe), Ben Hunt on lowering rates, a nice piece university endowments and private-equity (i.e., locusts), fintech gone awry, Phil Bak and Mike Green on price-insensitive (i.e., passive) investing, managing inflation by trying to control the narrative, and the usual eclectica (which apparently is not an official word).
I’ll probably have a real estate-related post this weekend. Have a good one, amigos.
By the way, I un-paywalled Before the Deluge, Part 1.
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