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.

Despite Obvious Signs of Recovery, Inflation Marches On

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Despite obvious signs of economic recovery, including the brisk demand for 'big ticket' machine tools as noted on the blog yesterday, seasonally and non-seasonally adjusted jobless claims improving, a constructive Silver-Gold Ratio (SGR, chart below), implying improving general market liquidity with SGR's proximity to major support that NFTRH has been following for the last couple of months; despite these positive signs Ben Bernanke and the US Fed hold resolutely to a cautious view of the US economy.  As part of this resolution, they have committed to hold rates near zero until late 2014.  Huh?  What gives?  Will this not create inflation?

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Deflation or Just a Point on the Continuum?

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Excerpted from the January 15 edition of Notes From the Rabbit Hole, NFTRH170

From Bloomberg on Friday [13th]: “Stocks fell, trimming a weekly gain, while the euro and commodities slid after reports that several European nations will have credit ratings cut by Standard & Poor’s. U.S. Treasuries rose…”

This is the news of one failing major currency benefiting the exchange rate of another, along with the Treasury bonds it denominates. Deflation is not global hot money hysterically running from one intrinsically worthless currency to another any more than the 2005-2008 “death of the US dollar cult” represented hyperinflation.

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Gold-Silver Ratio and Its Implications (by Tanashian)

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The GSR is an 'early warning' indicator on liquidity.  Its uptrend was a negative divergence to the stock market heading into the recent bear fesitivities and as long as it remains in the noted uptrend, it will negatively diverge the bull, global inflationist policy making or not.

Flipping the Silver-Gold ratio on its head, we find the GSR in a nice uptrend after it was clobbered down and out of its bottoming pattern last year by the Vampire's QE2 policy announcement.  Once the bottoming pattern broke in the GSR, NFTRH abandoned the intense risk management and rode to a nice solid +42% return in the speculative portfolio.  Thank you Ben.

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Drip Drip Drip

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First, I want to say a big Thank You to Slopers for supporting the blog's advertisers. I appreciate it.

I've never had the misfortune of enduring Chinese water torture, but I'm vaguely acquainted with the concept: a person is immobilized underneath a source of water which drips at random intervals. The uncertainty of knowing when the next drop is going to fall is supposed to be maddening.

Well, I think I can vouche for the mental effect. The "headline risk" from the Euro-clowns has been persisting for months now. I believe I read this is the seventeenth – SEVENTEENTH! – meeting of the big-wigs to "cure" the Euro-mess. Rest assured, there will be an eighteenth.

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Gold (by Gary Tanashian)

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The public now hates the fact that it bought into this gold scam.  "Damn, if only I could have held out and not gotten so emotional, I would have remained calm and let our dear leaders find a solution instead of buying into this bubble" says the public.

Real gold players know that the above is a necessary ingredient to preparing the ancient relic for the next leg in its bull market.  But a key question remains as to gold's technical status.  As we have noted all along (since the upside panic last summer) in NFTRH and on occasion here on the blog, gold has needed continued correction as measured in Euros, Loonies and to a lesser degree, Aussie Dollars.

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