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Paul Krugman
@paulkrugman
, 3 tweets, 1 min read Read on Twitter
The idea that gold prices predict inflation is definitely a zombie – it should have been killed by evidence, but just keeps shambling along 1/
The financial crisis and aftermath were associated with a big runup in gold prices, bc interest rates on alternative assets fell so low. The inflation rate ... fell 2/
Soybeans, like other commodities, doubled in price from 2007-8; inflation then fell sharply 3/
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Paul Krugman
@paulkrugman
There's nothing magic about the yield curve – bond investors operate off the same information as the rest of us, so it's a gauge of optimism/pessimism rather than something that might actually cause a recession. But damn, it's striking 1/
Every modern recession has been preceded by a yield curve inversion; every modern inversion has been followed by a recession. So this is pretty striking. And it's actually even more striking given that short-term rates are low 2/
Basically, short rates can only fall so much, while they can rise without limit. So there's an upward bias to the spread between long rates, which reflect expected future short rates, compared with short rates; not as much as there used to be, but still 3/ krugman.blogs.nytimes.com/2011/05/30/the…
Read 4 tweets
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Paul Krugman
@paulkrugman
Thinking some more about how @ewarren seems to be gaining ground by proposing concrete policies. Political pundits often prefer to talk about "character" rather than policy – but policy is often the best way to judge character 1/ nytimes.com/2019/05/28/us/…
I wrote about this a lot during the Bush years: W's dishonesty on taxes and Social Security was a clear clue that he would be the kind of guy who would take us to war on false pretenses. 2/ nytimes.com/2005/10/14/opi…
Similarly, the policy nonsense of pundit favorites like Marco Rubio were a strong indicator that they would be the moral failures they have proved in the Trump era 3/ krugman.blogs.nytimes.com/2015/10/30/pol…
Read 5 tweets
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Paul Krugman
@paulkrugman
Checking in after 30 miles cycling straight into the mistral. I gather that the trade war is proving good and easy to win ... meanwhile, about that Trump plan to take tariff revenue and use it to subsidize farm exports – aside from being lousy, impractical policy, it's illegal 1/
i don't just mean illegal under international trade law. I'm pretty sure that Trump lacks domestic authority too. US trade law gives the president huge discretion in imposing import tariffs, as long as he's willing to make a mockery of criteria like national security 2/
But an export subsidy? Maybe there's something I don't know, but that sure sounds like an expenditure that requires Congressional authorization. Am I missing some clause in the law? And is there any reason to believe that the Pelosi House would help Trump here? 3
Read 3 tweets

Related threads

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John Reade
@JReade_WGC
#Gold: There is an interesting story on Bloomberg suggesting that China could dump Treasuries, not as part of the #TradeWar but to defend its currency.

bloomberg.com/news/articles/…?
#Gold: Certainly, the RMB has quickly fallen in value against the USD and Euro over the past month, as this chart of a 50:50 USDCNY EURCNY blend shows.
Gold: Together with the move in US dollar-denominated #gold back towards $1300/oz, this has propelled #gold in renminbi towards a recent high.
Read 10 tweets
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Henrik Zeberg
@HenrikZeberg
Hi #fintwit 😎 We are approaching a watershed moment in markets. Final deflationary phase of Kondratiev's winter is about to play out. Huge implications for #EUR, #Gold, #SP500, #DXY etc. I have some new interesting followers - hence something extra in this week's #HZupdates
#Kondratiev's winter is a period where #Velocity of Money drops which creates a disinflationary economic environment, where growth is subdued due to #debt levels. Since ~2000 we have been in this winter - and are still to see a range of "major economic events" unfold #HZupdates
In fact, we have never left the #Financial #Crisis. We have only been bouncing in the great "Financial and Sovereign Debt Crisis" of this #Kondratiev's winter. This can be observed from the #Deflation Gauges #Copper, #XAU, AUD, EUR. We are about to see wave C develop #HZupdates
Read 21 tweets
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David Jensen
@RealDavidJensen
@Halsrethink @RemainSovereign @TFMetals @BullionStar @jameshenryand @michaellebowitz @dlacalle_IA @DA_Stockman @RonPaul @RonPaulInstitut @MarkTOByrne @MarkYusko @ErikSTownsend @AndrewBellBNN @realDonaldTrump @LouDobbs @Varneyco @MariaBartiromo @gatewaypundit @JeffSnider_AIP @TruthGundlach @epomboy @PaulCraigRobert @LanceRoberts @TheBubbleBubble @POTUS @TayTayLLP @ronanmanly @jimiuorio @MoneyMetals @stranahan BRICS nations for years openly discussing trade w/ "parallel" monetary system including gold trade settlement.
Saudi put in place RippleNet alt. to SWIFT that allows bank-to-bank real-time settlement in any medium of trade.
Italy signalling ready to go.
@Halsrethink @RemainSovereign @TFMetals @BullionStar @jameshenryand @michaellebowitz @dlacalle_IA @DA_Stockman @RonPaul @RonPaulInstitut @MarkTOByrne @MarkYusko @ErikSTownsend @AndrewBellBNN @realDonaldTrump @LouDobbs @Varneyco @MariaBartiromo @gatewaypundit @JeffSnider_AIP @TruthGundlach @epomboy @PaulCraigRobert @LanceRoberts @TheBubbleBubble @POTUS @TayTayLLP @ronanmanly @jimiuorio @MoneyMetals @stranahan More to the point - #gold seems to be the focal point of new trade settlement system.

“Fiat money, in extremis, is accepted by nobody. Gold is always accepted." Alan Greenspan.

realnoevremya.com/articles/2075-…
@Halsrethink @RemainSovereign @TFMetals @BullionStar @jameshenryand @michaellebowitz @dlacalle_IA @DA_Stockman @RonPaul @RonPaulInstitut @MarkTOByrne @MarkYusko @ErikSTownsend @AndrewBellBNN @realDonaldTrump @LouDobbs @Varneyco @MariaBartiromo @gatewaypundit @JeffSnider_AIP @TruthGundlach @epomboy @PaulCraigRobert @LanceRoberts @TheBubbleBubble @POTUS @TayTayLLP @ronanmanly @jimiuorio @MoneyMetals @stranahan When a central banker or economist mentions 'stimulus', they are talking about diluting the currency through debt currency issuance - to create REAL GROWTH.

This is the insanity & silly talk promoted by central bankers globally.

Nobody asks the question.

#centralbanking #gold
Read 55 tweets
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John Reade
@JReade_WGC
Gold is trading quietly today at 1290/oz. The RSI, at 63, is in positive but not overbought territory and my colleague, Jaspar Crawley, points out that the spot #gold price has made a golden cross, with the 50-day crossing the 200-day (and with positive spot momentum).

1/7
Gold: Jaspar suggests that this may trigger some momentum buying in #gold but I wonder whether the active Comex future (Feb) is more important and the golden cross in this is still some way away.

2/7
Gold: I hardly ever mention the B word (Brexit, not bullion or bars) because I don’t think it matters for the global #gold market and yesterday’s lack of reaction is a partial justification for this stance.

3/7
Read 7 tweets
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John Reade
@JReade_WGC
Gold: I find it ironic that that the government shutdown is making it 'harder' to trade #gold with confidence.

The CFTC's commitment of traders (COT) report is delayed indefinately while the US government is out of action.

1/3
Gold: Fortunately, Comex is not a government entity and continues to function. As you can see from here, open interest is reported daily and has increased quite a lot (4moz equiv) since 18 December.

2/3
Gold: Simplistically, with gold prices going up and OI up, speculators are likely adding to longs, driving the OI change and helping the price move higher.

I estimate the net managed money long is now at least 6.5 moz but could be more if short covering has happened too.

Ends
Read 4 tweets
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John Reade
@JReade_WGC
Gold: Tomorrow marks the 10-year anniversary of the failure of Lehman Brothers and, consequently, economists, market commentators and journalists have been rolling out their thoughts on both the financial crisis and the subsequent decade.

1/14
Gold: How did #gold fare through the crisis? This chart, from July 2008 to July 2009, shows no sign of gold moving rapidly higher? In fact, gold fell in the fourth quarter of 2008 as the dollar strengthened and gold was used as a source of liquidity (and sold.)

2/14
Gold: Although in the first half of 2009 #gold was comfortably above the level it was when Lehman failed…

3/14
Read 16 tweets

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