Tag: Commodity

2020 Silver Recap

SILJ: +33.46%* in 2020 Commodities were one of the only major asset classes that had not participated in the 11-year bull market leading up to 2020. Macro factors like record levels of government stimulus, artificially low yields, market volatility and a supply/demand imbalance are setting the stage for alternatives to equities and fixed income, like… Read more »

Will the Coronavirus Make the Fed Sick?

As seen in Bond Buyer. Continued uncertainty regarding the life cycle of the new coronavirus contagion is flattening the yield as a flight to quality is driving down treasury yields.  With the Fed expected to stay on hold this week, shorter maturity bond yields have declined less than long term maturities. So this week the… Read more »

Fed Can’t Fix Repo Market by Printing Money

Financial light tunnel

bondbonAs seen in Bond Buyer. On Tuesday, the New York Fed provided only $30 billion of 14 day financing despite more than $60 billion in demand.  The New York Fed also provided $75 billion in overnight lending that came close to meeting the $80 billion in demand.  These actions are helping to bring overnight financing… Read more »

Release Excess Reserves to Save Repo

Excess reserves are nearly $1.4 trillion and yet the Fed needed to inject $53 billion to bring overnight repo rates down from a high of 10%.  The assumption is that we do not have enough excess reserves.  It’s not that there aren’t enough reserves, but that they are difficult to pry loose from the Fed… Read more »

Inflation Isn’t Dead Yet

Core CPI was higher than expected at +0.3% for July and 2.2% year over year.  Inflation expectations have taken a nose dive according to the breakeven inflation rate on TIPS (“breakeven” is the difference in yield between an inflation protected treasury bonds (TIPS) and an equivalent maturity traditional treasury yield since TIPS also appreciate at… Read more »

Small Cap Silver Miners Continue to Rally

Over the last 2 months since the end of May, precious metals have performed well.  The ETFMG Prime Junior Silver ETF (SILJ) has outperformed both commodities Gold (GCQ9) and Silver (SIU), given strong fundamentals and analysts’ sentiment related to the mining sector in general. Performance for short time periods may not be indicative of future… Read more »

Collateral for Excess Reserves

As featured in Bond Buyer. The minutes from the June 18-19 Fed meeting show that the Fed is considering allowing banks to use collateral, such as T-Bills for excess reserves. They are considering setting up a repo facility that essentially results in banks simply posting T-Bills instead of cash for excess reserves. The minutes reveal… Read more »

Imagine Libra as an ETF

There is a lot of confusion over Facebook’s proposed electronic currency, Libra, because, well…it is confusing.  No one, not even Facebook, is sure of how Libra will take shape.  The goals of the currency are generally to improve the ease of electronic transactions and broaden the access to banking.  It’s like mobile banking on steroids…. Read more »