Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Tilting at Windmills (by Gary Tanashian)

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Excerpted from the June 3 edition of Notes From the Rabbit Hole, NFTRH190:

On June 20th the Federal Open Market Committee is going conclude a two-day meeting and release a summary of their view of the economy, most likely including an ‘unwelcome’ decline in inflation. That of course would signal a dreaded deflation, which are the windmill ‘giants’ to our Dear (monetary) Leader’s Don Quixote…

"What giants?" asked Sancho Panza.

"Those you see over there," replied his master, "with their long arms. Some of them have arms well nightwo leagues in length."

"Take care, sir," cried Sancho. "Those over there are not giants but windmills. Those things that seem to be their arms are sails which, when they are whirled around by the wind, turn the millstone."

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Reviewing the Macro ‘Play’

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There are signs in the recent jobs and ISM reports that the previously inflated economy is decelerating. Late last week, the clown running JP Morgan said stupid things about the smart [read: talented] people he has running his high risk trading operations. Europe is of course front and center as it continues to fall apart, with Gilts and Bunds rising on ‘safe haven’ buying and the bonds (debt) of Greece and other Euro basket cases declining toward their value, which is less than zero.

The precious metals appear to be watching for signs of outwardly promoted QE policy. But NFTRH has remained cautious on the timing of this pending a crack in the US stock market, so let’s review the big index.

 

 

 

 

 

 

 

 

 

 

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Gold Stocks & Treasury Yield Relationships

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There is no way to put lipstick on the pig that is the fact of HUI's failure below important support at the 475-500 zone.  But the fact is that the HUI has benefited from a rising yield curve (panel 2) and a declining long term yield (panel 3, AKA our biggest picture of an ongoing deflationary need to correct or 'the Continuum', which is periodically met by policy makers' inflationary actions).

 

 

 

 

 

 

 

 

 

 

 

 

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30 Year/2 Year Yield Curve Forecasting Deflation?

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The 30 year / 2 year Treasury yield curve has been on a steady march higher since 2007.  This makes sense since that was the year things started falling apart in inflated, debt saturated developed global economies, led by the nation that showed 'em how it's done when it comes to economic management by inflation; the US.

When long term yields are rising faster than short term yields, it is a sign of stress building toward either a breakout in inflation expectations or, as has been the case thus far since 2007 (and really, since the age of Inflation onDemand began in 2001), impending reversal of the excesses.  Unfortunately, in an age where economies are managed by inflation (by monetization of Treasury/Sovereign debt in service to increasing money supplies) these reversals tend to be shall we say, violent.

 

 

 

 

 

 

 

 

 

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Gold’s Decade-Long Bull Run is Dead (by biiwii)

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…says Gartman.  From Forbes entry in the 'Running of the Goldbugs, 2012' sweepstakes:

Bernanke delivered the fatal blow to gold’s ten year bull market, according to Dennis Gartman.   Gold has been in bear territory since the summer of 2011, when it topped out above $1,900 an ounce, with the latest post-FOMC sell-off inflicting irreparable technical damage, he says.

Well close Dennis.  But let's fine tune a little:  Unbridled panic-fueled momentum drove gold unsustainably higher as it took a mini blow off and very predictable correction.  Gold is not broken in its secular bull market (and not necessarily even the cyclical one out of 2008) by any rational technical parameters.  Not as of this writing and thus, not as of your little Forbes piece with the alarmist headline.  'Irreparable technical damage' Dennis?  Where?

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