Charts Indicate Central Banks Must Tighten Monetary Policy: Part I

the Curmudgeon




It's been 11 months since the Curmudgeon has posted commentary and we're very glad of that decision.  The financial asset mania's and mega bubbles have only gotten larger and have now been joined by Bitcoin (see chart below).  In our opinion, these never before seen manias were created by global central banks that have kept real interest rates NEGATIVE for over nine years.  However, that game may soon be over, based on DoubleLine and Bank of America (BoA) webcasts we participated in today.


The following charts (with captions noted) speak for themselves:


Fed & Central Bank Assets Have Exploded since 2008



Fed & Central Bank Balance Sheets Will be Shrinking Next Year




EuroZone PMI Above ECB Threshold



U.S. Leading Indicators in Uptrend- No Recession in 2018



U.S. PPI Rising Rapidly – Will CPI Follow?


Is the Fed Watching Bitcoin’s Parabolic Rise?



Looser Financial Conditions Two Years Into Fed Tightening Cycle



U.S. Public Debt Now 104% of GDP vs. 56% in 2002



Commodity/Stock Returns Lowest in 50 Years
Is That Bullish For Commodities and/or Bearish For Stocks?



U.S. 30-Year Treasury Yield Still in a Downward Trend



While U.S. 2-Year Treasury Yield in Sharp Uptrend




Good luck and till next time...

The Curmudgeon


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Curmudgeon is a retired investment professional.  He has been involved in financial markets since 1968 (yes, he cut his teeth on the 1968-1974 bear market), became an SEC Registered Investment Advisor in 1995, and received the Chartered Financial Analyst designation from AIMR (now CFA Institute) in 1996.  He managed hedged equity and alternative (non-correlated) investment accounts for clients from 1992-2005.

Victor Sperandeo is a historian, economist and financial innovator who has re-invented himself and the companies he's owned (since 1971) to profit in the ever changing and arcane world of markets, economies and government policies.  Victor started his Wall Street career in 1966 and began trading for a living in 1968. As President and CEO of Alpha Financial Technologies LLC, Sperandeo oversees the firm's research and development platform, which is used to create innovative solutions for different futures markets, risk parameters and other factors.

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