Diamond News Archives
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The rational reaction to the Trump tax cut: “This is lunacy. How can we ramp the deficit to over a trillion dollars while slashing the primary source of funds to pay for our spending?”
The central bank reaction: “Looks good to us!”
In the Fed “Everything Is Awesome” echo chamber, there are no cloudy days and everyone gets ice cream, all the time.
Gold has gained notably since The Fed hiked rates in March (as stocks have suffered) and the yield curve has collapsed, hardly signaling market confidence in the Jerome Powell's first rate-hike. But it appears the critical highlights from the meeting are a positive outlook on Trump's growth agenda.
The staff saw the risks to the forecasts for real GDP growth and the unemployment rate as balanced. On the upside, recent fiscal policy changes could lead to a greater expansion in economic activity over the next few years than the staff projected.
On the downside, those fiscal policy changes could yield less impetus to the economy than the staff expected if the economy was already operating above its potential level and resource utilization continued to tighten, as the staff projected. Risks to the inflation projection also were seen as balanced.
An upside risk was that inflation could increase more than expected in an economy that was projected to move further above its potential. Downside risks included the possibilities that longer-term inflation expectations may have edged lower or that the run of low core inflation readings last year could prove to be more persistent than the staff expected.
ORIGINAL SOURCE: FOMC Minutes Show Members Bullish On Trump Tax Plan, Worried On Trade War[1] by Tyler Durden at Zero Hedge[2] on 4/11/18...
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Gold traded higher overnight in a range of $1339.50 - $1352.40.
It triggered some buy stops over yesterday’s $1343 high along with the double top at $1347-48 (3/28 and 4/2 highs) and the $1350 options strike to reach its high, where it was capped in front of resistance at $1354 (down trendline from 1/25/18 $1366 high).
Gold was supported by weakness in the US dollar (DX from 89.64 – 89.45, fresh 2-week low), which was pressured by strength in the yen (107.25 – 106.70, stronger than expected Japanese Machine Orders, PPI) and the euro ($1.2350 - $1.2395, Draghi says confident inflation will rise to ECB’s goal).
Mostly weaker global equities were also gold supportive with the NIKKEI off 0.5%, the SCI rose 0.6%, European shares were off 0.1% - 0.5%, and S&P futures were off 1.1%.
Some bellicose tweets by Trump (after Russia’s ambassador to Lebanon said Russia would shoot down US missiles headed to Syria) also rattled markets and were gold supportive:
Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!
Our relationship with Russia is worse now than it has ever been, and that includes the Cold War. There is no reason for this. Russia needs us to help with their economy, something that would be very easy to do, and we need all nations to work together. Stop the arms race?
At 8:30 AM, a lower than expected reading on US CPI took the US 10-year yield down to...
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Make no mistake about it: Central banks need a massive overhaul, posthaste.
And make no mistake about this either: It will not happen, for one simple reason.
At this point in the fiscal Ponzi game, fundamental change is synonymous with fundamental pain. The sooner we address central bank misdeeds, the better off we’ll all be, but the fiat printing parade has gone on so long now, truly facing up to it means experiencing all of the delayed pain central banks have worked so endlessly to avoid.
But it can’t be avoided forever. That’s what a free market is: upside and downside. Attempting to artificially print away the downside via endless stimulus is the same logic that drives someone who attempts to artificially drug away reality. “Maybe I can just keep doing this forever!” It’s never worked, not once.
Reality always wins in the end. Irresponsible fantasy, chemical or fiscal, never lasts.
Even as central banks face important transitions, the choices of their new leaders have reflected a desire for continuity. Most obvious, Kuroda has been confirmed for another five-year term at the BOJ, and Zhou was replaced in March by his own deputy governor, Yi Gang. Even Yellen’s successor, Jerome Powell, will probably amount to more of the same.
Of course, Powell was initially presented as a break from the past. After all, if President Donald Trump had wanted to remain on the same path, he would have just selected Yellen for a second term (which would have been more in line with tradition).
But, in Trump’s view, the Democrat Yellen was a vestige of Barack Obama’s administration, and thus had to be replaced with a declared Republican like Powell. But both Powell...
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The world's biggest mining companies must improve their human rights record and step up efforts to curb environmental damage, the Responsible Mining Foundation said in its first review of global mining practices.
The Responsible Mining Index, launched in Geneva on Wednesday, assesses the policies and practices of 30 large companies that produce 25 percent of mined commodities, from gold to copper and coal, operating in more than 40 countries.
Many have established good policies on some issues such as tackling corruption and limiting planet-warming emissions, a report on the index said.
But most have taken little action in other areas, including monitoring how mining affects children and protecting female workers from harassment and sexual exploitation, it added.
Hélène Piaget, CEO of the Responsible Mining Foundation, said the results showed many companies had introduced responsible mining policies but these were not always “translated into effective actions”.
The report said responsible mining was "a realistic goal". But the adverse consequences of mining minerals and metals, such as high worker fatalities, prevent many companies from achieving the standards society expects from the industry, it added.
Across the 30 companies, 331 workplace deaths were reported in 2015 and 2016, it noted.
The index ranked companies on six operational areas, including working conditions, environmental responsibility and ethical business conduct.
Multinational mining firm Anglo American Plc was the strongest performer overall due to its investment in the economies of producing countries, human-rights due diligence and engagement with local communities, the report said.
An Anglo American spokesman told the Thomson Reuters Foundation the company had launched a new sustainability strategy focused on diversity, gender equality and environmental responsibility.
Last year it introduced a code of conduct for all...