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Jan 17 24 tweets 7 min read
1/ The theft of the post Volcker by the Central Bank and Fiscal "Shamans"

So, in a previous post, we discussed the question of the permanent LBO wealth gain that is typically great with a war condition. We argue that it was a transfer because someone is paying for it.
2/ Today we explain who is paying for it.

We have discussed the benefit of the war economy for the leveraged investors. And today, we have a Treasury secretary (Bessent the hedgie) who benefited handsomely from those policies. AND the #Fed’s Chairman comes from LBO!!!
Jan 17 7 tweets 4 min read
1/7 Let's remind ppl about UST "illiquid" in October 2022 now for tracking purposes, and to understand “how strong” the UST market is ( previous thread hacked)
With rates differential the JPY was sinking in 07/2022.
Japan was making an appeal that fell on deaf ears. Image 2/7 So ok then Japan sells UST In 09/2022 that looked very much non-coordinated.
Why?
analysts would not expect a nod coming from the US... And it came as a surprise,
Suzuki did not say anything when asked if it was coordinated. but he was clearer dismissed earlier.. english.kyodonews.net/news/2022/09/c…Image
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Jan 12 13 tweets 5 min read
1/13 🧵
Rubbish theory about strong demand & inflation. Let's kill that w/ hard data. Some commentators
@RaoulGMI
argue that most have it wrong about inflation b/c in the 70s, you had a lot of demand lots of ppl entering the workforce.
Well....
Price fell post civil war... Image 2/13 In 1891 prices were BELOW the level before the civil war. Disaster right? right? Image
Jan 9 9 tweets 2 min read
1/ Trump and Biden are both short UST

The Unsustainable Reserve
In 1925, the French population opted for the British Pound because, well, it was popular before WWI. 2/ Little did they know that using FX as reserves in 1922 had made the British economy inflationary and completely uncompetitive in trade.
So, evidently, when France sold GBP for gold, the inevitable consequence was a devaluation of the Pound.
Jan 2 17 tweets 4 min read
1/ Over the past few days, there has been significant news regarding the situation surrounding U.S. Steel. 2/ First, the mayors of towns in Pennsylvania, where USW labor contracts are in place, have urged government authorities to approve the deal for the well-being of their communities.
Dec 29, 2024 25 tweets 8 min read
1/25 🧵
How to Rug pull a system of “reserve ccy” in history? Not so complex;
it happened twice.
The 3rd is happening rn, (a smoother one)
How
In 1927 Rist from Bank of France is in NY with Strong and Montagu Norman and tells: "Enough FX as reserves, send me my #Gold". Game over 2/25
In the future episode we will explain the similarities and differences with Rug Pull II with France again in the 1960s asking for its #Gold. And after that, the current Rug Pull operated by China (arbing #Gold, a smooth one, actually not bad for US exporters).
Dec 29, 2024 24 tweets 6 min read
1/24🧵
Currency raiders episode VI
“The losers get their stakes back”.
For people who had lived in a currency regime prior to 1922 or know very well those, a system where the country with a large trade deficit has very a large PPP would be unthinkable. It's being undone though. 2/24
It has to do with a device started about a century ago worlwide (before it was restricted to colonies). In episode IV we discussed a trade-dominated regime in FX. Today we discussed the nothingness in trade of the system of accepting foreign FX as a reserve asset in foreign Central Banks.
Dec 29, 2024 25 tweets 7 min read
1/25 🧵
We have bonds raiders for a long time now.
The Fun in is the ccy now
Today:
Currency Raiders episode V:
We will show that wars destroy bonds & ccy
AND
that the #Gold price used in the reserve standard Post 1922 was absurdly low, one of 2 causes of 1929 mayhem. 2/25
Betting on Bonds or holding the ccy with large war expenditures/primary deficit, logistical roadblocks, commodity hoarding is madness. This is what Kemmerer wrote in 1920 about the inflationary financing of WWI by the US.
Dec 14, 2024 5 tweets 3 min read
1/5 Interesting Cocktail
INGREDIENT ONE:
$IBKR CEO worried about extremely low margins on #BTC (... you know the stuff to pump USD and UST)
2/5 INGREDIENT TWO:
Druckenmiller buys KRE, Fed Pauses

Every one-eyed deflationist trader (who can't even conceive what fiscal dominance and external drain actual exist - second eye-) is caught totally flat-footed on inflation re-acceleration and credit re-expanding a bit (particularly on community banks).

.cnbc.com/2024/11/18/dru…
Dec 13, 2024 16 tweets 5 min read
1/14 Key takeaways from the FDIC report:
The US seems to get out of recession wut 🤯?
And inflation seems to have bottomed
The FDIC seems to indicate that inflation has bottomed, will re-accelerate, and that we are getting out of recession. Image 2/14 RECESSION TAKE:
What is striking is that loan growth is LOWER than inflation, still in Q3 2024 YoY.
Remember that ISM PMI Manufacturing was below 50 the whole time.
WHY NOMINAL GROWTH IN LENDING INFERIOR TO INFLATION INDICATES RECESSION @EconguyRosie Image
Dec 11, 2024 22 tweets 4 min read
1/ The comments by Ray Dalio were made a few weeks ago, and the message has been crafted so carefully that most people have not noticed key elements that are not so reassuring. No country can succeed if education is not of high standards and broadly accessible. Image 2/ Without caring about acting as unified block as a country. Image
Dec 3, 2024 12 tweets 2 min read
1/14 RISK-ARB!
US-STEEL / NIPPON STEEL

Right now the implied probability of US Steel failure is around 59% using an binomial situation with two outcomes.
Play 📺 the recording (PAY PER VIEW)
Here 👉 graphfinancials.com/getthestory?ur… 2/14
The downside is about 13 USD if the Company comes back to pre-deal price,

But is 18 USD upside if the Company gets acquired,
So in effect we have an implied probability of success of just above 0.4
Dec 1, 2024 5 tweets 3 min read
1/ Thanks for reminding everyone that the USD is a total political artificiality, .... (more tenuous w/ Oreshniks)

Can you imagine this
"If BRICS countries are refusing to accept our Gold in net trade settlement.... blah blah blah"
STOP 😂... it would not happen! Image 2/ Half of the world's Gold Demand is bling (its primary purpose as always), so you can always recycle that in this market. Silver is also useful.

If the US sells more nice US products like Nike Shoes, advanced computing stuff, Californian wines, agri products... none of this will be a problem.Image
Nov 28, 2024 22 tweets 6 min read
1/21 There is no “correlation” between residential consumption of electricity and the number of EVs in China.
THERE IS A DIRECT CAUSE/EFFECT RELATION. PERIOD.

(enough of that “supposition level / correlation” non-sense)

If a car is electric it will not consume gasoline. 2/21 It consumes electricity.
Consumption of Residential Electricity in China below.

Jan-Feb + 10.5% yoy
MArch + 15.8% yoy
April + 5.9% yoy
May + 5.5% yoy
June + 5.2% yoy
July + 5.9% yoy
August + 23.7% yoy
September + 27.8% yoy

QUESTION: Is it “hitting snags”?
Nov 15, 2024 11 tweets 4 min read
1/ Bonds Raiders III:
Loose rates are not the “nominal level” rates.
Thornton explains how the rates were loose at 5% in 1810 during the fiat episode of the wars in the UK but very tight at 5% in hard convertible currency in 1793.
PLAY 📺 the link
HERE 👉 link.graphcall.com/Bonds-Raiders-…Image
2/ Same nominal rates, completely different financial conditions.
So why does the rate of interest go up during war? More supply of bonds and a falling currency versus commodities. Image
Nov 5, 2024 19 tweets 5 min read
1/18 Bonds Raiders Episodes (Revised 2nd Edition)
BONDS RAIDERS EPISODE 1: THE BONDS BUBBLE

We’ll show today that US Yield Curve Control has already happened and has already reached its limits. 2/18
Not so long ago, Dr. Roubini plainly stated on a Jack Farley episode that some Western governments were simply monetizing debts before 2021.

And it was acceptable because there was no inflation at the time.
Oct 28, 2024 22 tweets 6 min read
1/21 ANATOMY OF CHINA’S CONSUMER SPENDING STIMULUS VIA EVs
Today we have the narrative that China’s economy is weak because Oil consumption is down. We can twist narratives too… Image 2/ We could use the data on electric consumption up 8.9 % and more importantly up 22.3% you and write this
“Huge increase in consumer disposable with double digit consumption across the board evidenced by 22.3% rise in electricity consumption.
So which one is right? Image
Oct 25, 2024 25 tweets 6 min read
1/25 Last year I posted this, and it was hacked & deleted at my previous account @GraphFinancials. In light of current events? Reposting.

Is the world’s trade going to collapse if we have no reserve ccy? No.

Explaining the Bills of Exchange w/o a Centrally planned Gold standard - prior to 1870s and prior to emergence of centrally planned banking (Central Banks)
It was actually more stable, more flexible 2/25
FIRST POINT Central planning (central banks) is absolutely not indispensable. The system was more stable prior to the Gold Standard and CBs that emerged in 1870s-1880s.

Centralization has been in fact a political-driven central planning process rather than a market process and has resulted in unstability. (like many central planning. It has created one of the largest period of monetary instability), that is the XXth century.Image
Oct 19, 2024 12 tweets 3 min read
1/12 THE FISCAL LESSONS THAT FRANCE FAILED TO LEARN IN 1781 & THEIR INEVITABLE CONSEQUENCES FOR ITS ARISTOCRACY
Necker, the French Minister of Finance in 1780s France before the Revolution, was popular.
Not b/c he was a demagogue.
The opposite.
Worry not we will translate Image 2/12 He was a reformist trying to rein in the reckless spending of the aristocracy in power, whose consequences would inevitably be borne by the common people. (the middle class)
Sep 27, 2024 13 tweets 3 min read
1/12 HOW TO SHORT THE FED? EXPLANATION
BTW:
NOT SHORTING THE COMMERCIAL BANK. NOT REALLY AN ATTRACTIVE TRADE, BUT SHORTING THE FED CAN BE DONE.
Banks have a funding problem that will be resolved by lower rates. 2/12 They also have too much government bonds and reserves, which will hinder their profitability. Would that make it a systemic situation?
NO.
Not an attractive short in my view.
The bank to short is the Central Bank.
Sep 23, 2024 19 tweets 4 min read
1/20 VENDOR FINANCING ON ITS SLOW WAY TO KAPUT:
INDIA AND STERLING IN 1898, JAPAN AND THE USD IN 2024
The FX-as-reserves standard that started in 1922 was, in fact, the first time a system of FX-as-reserves was employed on other developed nations by the UK and the US. 2/20 We will see that it traces its roots as a colonial monetary system in a future post.
As Rueff explains, its purpose was to maintain the deficit of the reserve currency countries. Image