The U.S. dollar remains king and is now used in 48% of international payment transactions, the highest level in more than a decade
Source: Barchart. Macrobond
Despite all the talk, the world uses USD to trade
Source: DB
Hedge Funds now have the largest long position in the US dollar since February 2022
Source: Barchart, Bloomberg
During 25 years before joining the Euro Italian Lira lost 83% against Deutsche Mark. Last 25 years they have been pegged. How much value would the Lira have lost against Deutsche Mark without the peg?
Source: Bloomberg, Michel A.Arouet
Be careful not to look at gold only against the dollar. Gold is at its highest against many FIAT currencies
But even the $2,000 an ounce level is intriguing: despite clearly positive real rates and the appreciation of the greenback, gold is close to all-time highs. Looking forward, two scenarios are possible: o 1) Gold is overvalued and should soon depreciate o 2) Gold is seen as a safe haven against geopolitical uncertainty, but also against the political disorder in Washington and the declining confidence in the Fed. If this is the case, a possible depreciation of the dollar and a fall in the real interest rate could benefit the yellow metal. Bottom-line: Gold remains an attractive portfolio diversifier Source chart: Tavi Costa, Bloomberg
Fiat money debasement does have some strong polical and economical consequences
Javier Milei has just won Sunday’s presidential runoff against Economy Minister Sergio Massa. Javier Milei, a 53-year-old far-right economist and former television pundit with no governing experience, claimed nearly 56% of the vote, with more than 80% of votes tallied. Voters in this nation of 46 million demanded a drastic change from a government that has sent the peso tumbling, inflation skyrocketing and more than 40 percent of the population into poverty. With Milei, Argentina takes a leap into the unknown. He has promised to fix Argentina’s perennial economic problems by making drastic budget cuts, replacing the battered peso with the US dollar and shutting down the central bank. He will take office on December 10th.
There are few assets that can provide meaningful diversification benefit in a portfolio, particularly from a real return / purchasing power standpoint
In an environment where stocks and bonds are so highly correlated, notable to see the low correlation across commodities - Source: Bob Elliott.
Moments ago the yen spiked to a session high against the US dollar
The highest since Oct 12, after Japan's Nikkei reported that the Bank of Japan may tweak its YCC again and allow long-term yields to rise above 1% as soon as its Tuesdays meeting. Source: www.zerohedge.com
