October not a good month for gold

We need a reminder on this each year.

Lynette talks about Repo Market

Lynette answers my question: "Why aren't banks using excess reserves to supply the liquidity?"

Bitcoin starts crashing

Bitcoin started to crash and it will crash more as the cost per transaction has not found bottom yet.

 

Germany IFO index Vs. Germany GDP

The Ifo Business Climate Index is a closely followed leading indicator for economic activity in Germany prepared by the Ifo Institute for Economic Research in Munich, Germany.

Gold price Vs. GLD ETF

The gold price is now almost making an all time high, while the GLD ETF holdings are not nearly at their all time highs. So I expect higher gold prices to come, as there are a lot of investors that still need to move into the GLD ETF.

Retail Sales and Capacity Utilization Rate Leading Indicator for CPI

Retail sales have been moving up surprisingly, so I expect inflation to start picking up.

 

Capacity utilization rate is also bottoming out.

QE is going to be Big

So this is a visualization of the Fed balance sheet.

Currency in circulation is always going up and stands at $1.8 trillion. So the Fed has been decreasing its assets on the balance sheet and thereby decreasing reserves, which stand at $1.4 trillion. The amount of these reserves is too low and gave symptoms of liquidity problems.

These liquidity problems came from large and small domestic U.S. banks. We also know specifically that it was JP Morgan.

 

So now the Fed needs to increase its balance sheet to increase reserves again. And on top of that it needs to keep pace with the increasing amount of currency in circulation.

Currency in circulation at $1.8 trillion:

 

Reserves at $1.4 trillion: