SHCOMP & CNY: 1993-1994 = 2015-2016?
Much has been made about China’s need to devalue its currency vs. USD over the past year since the country abruptly nudged it immaterially lower in Aug-15. I honestly have no strong opinion or edge re: likelihood that this does or…
This Has Only Happened Prior to the Plaza Accord & the Global Real Estate Bubble
As of Dec-15 the spread between the trailing 56 month (an objective reference point: gold peaked 56 months ago on a monthly closing basis in Aug-11) rates of change in the USD and gold reached in excess of 67% (i.e.,…...
Encino Man
Here’s a blast from the past for you. On 1/15/14, or over two years ago, we had this highly compelling and very prescient post that emphatically stated in its title: “GREATER THAN 90% PROBABILITY SPX HIGHER IN 2014 WITH A…...
Looking for the Next Break in the Ongoing Chinese Depression
In late December we noted via this post that the SSEC’s crash off its mid-15 highs to-date was very similar-looking to the path the DJI took of its 1929 high to begin the Great Depression. Here’s an updated version of the analog comparing…...
SSEC Has Another ~20% of Additional Downside and is Likey to Remain in Relative Free-Fall
On the heels of our late Dec-15 post that suggested China’s depression was set to intensify in early 2016, I’ve updated that view via the SSEC plot below. The chart pattern over the past 18 months – base, large run…...
USDCNH Likely to Reach Low $7s Before Any Abatement in Chinese Currency Depreciation
I have talked at length on the site about the deflationary forces behind CNH depreciation vs. the USD. My contention is that so long as a regime of CNH depreciation vs. USD is in place, global risk assets will remain…...
China’s Depression Set to Intensify in the Early Part of 2016?
Based on the significant deterioration over the past year or two in electricity production in China alone, some might assume the country is in depression. Comparing the SSEC’s decline off its Jun-15 high to the move the SPX took off…...
Global Deflation and Gold as a Function of Chinese Electricity Production
In the chart below I plot monthly Chinese electricity production (white) with gold (yellow) in the top panel. In the two panels below that I plot the 24 mo and 12 mo RoCs for Chinese electricity production, respectively. Note that…...
CNH Weakness Regime = Inexorable March Toward Greater Global Financial Stress
In the chart below I plot the following over the past year: USDCNH (inverted to show Yuan weakening; white) JNK (pink) Deutsche Bank (DB) 5 Yr CDS (inverted, so decline = CDS climbing; orange) SPX (red) TED spread (inverted, so decline…...
How & Why The Chinese Are Using Comex to Crush Paper Gold Prices While Simultaneously Laying the Groundwork for CNH to Become the World’s Next Reserve Currency
ZH has had much good commentary in recent months on the explosion in Comex open interest in gold (GC) relative to the amount of registered/deliverable physical held in related vaults, noting as recently as late NOV that the ratio had just…...