Inflation Peaks/Real-gdp Peaks/Interest Rates Peak

[flow5]

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[metalman]

Re: Inflation Peaks/Real-gdp Peaks/Interest Rates Peak

The rate-of-change in the proxy for real-gdp (monetary flows MVt) peaks in July. The rate change in the proxy for inflation (monetary flows MVt) peaks in July. Therefore it should be obvious: Interest rates peak in July.

Therefore: Gold will resume it's upward climb in July. Therefore: The exchange value of the dollar will resume it's decline in July.

so you're saying that leveling off we've seen in the gold price around $650 from $730 was the "ka" of "ka-poom" and from here long rates fall, the Fed cuts and brings down short rates, the dollar tanks, and gold takes off?

[Guest]

Re: Inflation Peaks/Real-gdp Peaks/Interest Rates Peak

Metalman - What about calling it just another correction? Buy points are when the bet stinks and looks like hell.

[flow5]

Re: Inflation Peaks/Real-gdp Peaks/Interest Rates Peak

Should last until March 2008.

[Mega]

Re: Inflation Peaks/Real-gdp Peaks/Interest Rates Peak

Gold has been falling a bit and don't forget that the central banks have a lot of Gold. I suspect that they sell a bit to knock the edge off Gold, however once we they been blead of enough stock than a REAL Gold run will come and they can dump what little they have, it won't stop it!
Mega

[flow5]

Re: Inflation Peaks/Real-gdp Peaks/Interest Rates Peak

Even with the power of compound interest, investments in debt instruments won’t be able to match those of gold. The exchange value of the dollar will continue to move inexorably lower with no end in sight. Congress & American Manufacturing aren’t doing enough about the problems (see also: http://www.jsmineset.com/) “US Dollar Weakness Trumps Market Manipulation”. - “see entire story”.


The rates of change in real-gdp & inflation both peak in July. With slowing growth rates, July will be the last month rates can possible rise. The fx market is predominately influenced by interest rate differentials. Lower rates will trigger the dollar’s fall. It appears this has already started to happen. I wouldn’t look for a reversal from this point forward, but since the top in monetary flows (MVt) is July, a little weakness is possible:


http://quotes.ino.com/chart/?s=NYBOT_DX&v=w US DOLLAR INDEX graph 5day
http://quotes.ino.com/chart/?s=NYBOT_DX&v=s US DOLLAR INDEX graph 1day
http://www.dailyfx.com/charts/Chart.html?symbol=EUR/USD EUR/USD graph
http://www.wtrg.com/daily/crudeoilprice.html DAILY CRUDE OIL PRICE graph
http://www.cbot.com/cbot/pub/page/0,3181,830,00.html CBOT interest rate futures
http://www.treasury.gov/offices/dome...ll_rates.shtml TREASURY BILLs


Series: DTWEXB, Trade Weighted Exchange Index: Broad
http://research.stlouisfed.org/fred2.../DTWEXB?cid=94 This graph shows the historical inverse relationship between the U.S. dollar & gold.


The housing market is just another commodity. Prices should fall during a period of “tight” money. Remember that housing prices rose over 83% in a five year period…Most of the ARM’s come due in the fall. Long term rates will be lower then.

[Spartacus]

Re: Inflation Peaks/Real-gdp Peaks/Interest Rates Peak

What number would you put the probability that interest rates will fall enough that ARM resets will have no effect (no large payment increases)

The rates of change in real-gdp & inflation both peak in July. With slowing growth rates, July will be the last month rates can possible rise.

The housing market is just another commodity. Prices should fall during a period of “tight” money. Remember that housing prices rose over 83% in a five year period…Most of the ARM’s come due in the fall. Long term rates will be lower then.

[zoog]

Re: Inflation Peaks/Real-gdp Peaks/Interest Rates Peak

ARM teaser rates in 2004 were often below 4% as I recall. (I pick 2004 because subprime mortgages were typically 3/1 ARMs, from what I've read, and so those 2004 loans would be resetting this year or next.)

According to this page, prime rate in 2004 rose from 4.25% to 5.25% throughout the year. So the teaser rates were below the prime rate... suppose that's why they call it subprime? Today the prime rate is 8.25%. Assuming that these mortgages are going to reset to current prime rate + some additional, the prime rate would have to fall to or below 4% for the payments to not change significantly.

[metalman]

Re: Inflation Peaks/Real-gdp Peaks/Interest Rates Peak

what about the un-conundrum? long rates are now a function of demand for usa assets, inversely correlated to economic performance. rising inflation and interest rates as the usa economy contracts, foreigners decrease purchases of dollar assets, and the dollar tanks...

[Jim Nickerson]

Re: Inflation Peaks/Real-gdp Peaks/Interest Rates Peak

The economy is now contracting. The bottom is Oct. Since the months with the sharpest declines are Sept. & Oct. and these months overlap the quarterly time frames used by the Bureau of Economic Analysis, it is unlikely a change in gdp will be recognized and it is unlikely any adjustments will be made. The market is vulnerable in these months.

This is inviolate & sacrosanct.

flow5,

Your opinion, as you chose to state it, strikes me as the words of a fool.

There is nothing that I have ever known that is inviolable. The are no opinions about where the markets will be in 2-3 months that cannot be wrong.

[Jim Nickerson]

Re: Inflation Peaks/Real-gdp Peaks/Interest Rates Peak

The truth depends upon the degree of ignorance or collection of prejudice that the advocate is laboring under. It of course doesn't make sense that my politics could be so accurate when considering those deacons who make economics a profession, John Kenneth Galbraith, etc. If I didn't know better I wouldn't believe it either.

Something that has worked for 94 years is not something to dismiss. The theory came from my friend, professor emeritus, an arm-chair theoretician when I became a commodity broker. I wouldn't classify him as a great economist, but as having wisdom in the much broader sense - a gentleman of exceptional intellect. He died a multimillionaire.

I'm sure that the time is coming where I will be wrong, but that time is probably several years away. I picked the bottom of the bond market in Sept. 81. I federal expressed the analysis to Jim Sinclair. I picked the stock market bottom in oct 82. I picked the stock market bottom in jun 84. All of these turning points are evident months & sometimes years in advance. I was just never any good at currencies.

I can't explain why professional economists are vacuous, perhaps they are idiot servants. Or maybe it's because they studied statistics instead of accounting. I don't know. It's beyond my understanding. Any junior high student could have discovered it. Even so, there are a few economists at the FED I respect. They just don't know the "Holy Grail".

Good enough, flow5. I see where you are coming from. Indeed, we are most fortunate to have your contributions.

[friendly_jacek]

Re: Inflation Peaks/Real-gdp Peaks/Interest Rates Peak

my mom was phi beta kappa, a child pathologist, discovered kawasaki's diease

Sure, here is a picture of your "mom":
http://georges.dolisi.free.fr/Schema...i_Tomisaku.jpg

You ARE a piece of work (or something else).

[Jim Nickerson]

Re: Inflation Peaks/Real-gdp Peaks/Interest Rates Peak

Sure, here is a picture of your "mom":
http://georges.dolisi.free.fr/Schema...i_Tomisaku.jpg

You ARE a piece of work (or something else).

Nice find, f-j, and for more info on Dr. Kawasaki, http://en.wikipedia.org/wiki/Kawasaki_disease

and perhaps a later image



Hmmm, must have had a sex-change operation.

Perhaps flow5 will clear up the confusion when he has a chance.

[Rajiv]

Re: Inflation Peaks/Real-gdp Peaks/Interest Rates Peak

For your information - from "Kawasaki Disease: A Brief History"

KD was independently recognized as a new and distinct condition in the early 1970s by pediatricians Marian Melish and Raquel Hicks at the University of Hawaii. In 1973, at the same Hawaiian hospital, pathologist Eunice Larson, in consultation with Benjamin Landing at Los Angeles Children's Hospital, retrospectively diagnosed a 1971 autopsy case as KD. The similarity between KD and infantile periarteritis nodosa (IPN) was apparent to these pathologists, as it had been to Tanaka earlier.

[Jim Nickerson]

Re: Inflation Peaks/Real-gdp Peaks/Interest Rates Peak

For your information - from "Kawasaki Disease: A Brief History"

Damned, Rajiv, you amaze me with your search skills. This is a nice article you found, which I think explains why they called it Kawasaki Disease. Below is from the article you found, and suggests to me flow5's mommie was not actually the discoverer of Kawasaki's disease. Had she been, it no doubt would be know today as "flow5's mommie's disease" and clearly the disease does not bear that designation.

Kawasaki saw his first case of KD in January 1961 and published his first report in Japanese in 1967.