Quote:
Originally Posted by Sooner or later
We have already been through outflow when you made the false claim "never have seen it before in the last 40 years".
At that time I showed you that we have had inflows for the 1st 3 months of 2021. I also said we should probably wait for the next data release of April numbers (15th of June) to see if we stay positive or go negative.
We have had a net positive inflow from China from Oct-March (damn near neutral over the last 15 months of data).
Positive from Europe. Negative from Canada and a big negative number from the Caribbean. (Caribbean?)
I will say it one more time...we should probably wait for April data to see if the inflo continues or we go negative.
https://www.federalreserve.gov/data/secholdtrans/treasurybondsnotes20210531.htm |
I cited the source...Druckenmiller of Duesquene basically said that in his 40 years of managing money that he had never seen a capital outflow of money from Treasuries (this was the larger infrence and a harbringer of things to come)...he is a successful manager of large sums of money and being that is his profession he has credibility. I have noted that since 2000 in times of duress foreign money has flowed into the USD and US Treasuries as a SAFE HAVEN which drove bond prices up and yields down. the reverse happened in 2020 I commented about that specifically in 2013 (and earlier) as an On The Beach strategy
The point of the argument was that in 2020 instead of foreign money coming in to the USD and Treasuries as a SAFE HAVEN it was leaving (per Druckenmiller). This denotes a sea change in the global perception about the USD's solidity. It is the ADVERSE SHIFT I mentioned in 2013.
Now you can quibble about my semantics and minutia all you like..but it doesn't change reality, as much as you would like it to. Shoot the messenger so you can ignore the message.
As far as pop growth and econ growth..Jeremy Grantham who is the strategist for a 120B + fund also stated the same thoughts in late 2012 and again on CR in 2013. He also has lots of street cred.
The main conclusion that I made in 2012 was that the US econ was going to grow between 1.5 to 2.5 percent as a benchmark going forward. It has largely been between those parameters with statistical variances. I would say that what I said was close enough for govt work. Also I said that growth did not meet the 3% growth parameter that the govt set out as a benchmark for sustainability of US fiscal policy, but everybody understood that as a given. that is why everybody has said growth has been anemic..
I also concluded that the only reason we have gotten the stellar growth that we have gotten is FED and Treasury juicing..it has kept the system bouyant at these levels and the corollary that they couldn't take the foot off the gas or else. One might say with diminishing returns as debt levels increases the drag on the econ. So the juicing has to become ever bigger...this has been born out by events. You can look at the veracity of that by what happened in late 2018 after the FED went from Acomadative to Neutral policy in an attempt to NORMALIZE the Balance Sheet and Interest rates. The FED did a quick about face, where Equities then did an about face rising to ever higher levels. .
In Sept 2012 wt QE3..wt the SP500 at 1450 I said that the SP500 would go to 2250 as the FED was guaranteeing the over and the under with the caveat that the amount of time it took to reach that number might skew it higher. . It took until Trump's election to breach that level. The point to be taken is that operationally Equities were a NO LOSE prop as long as the FED maintained it's street cred. That remains as true today as it did in 2012.
As far as current over Equity valuation..maybe not..the intrinsic value of the USD is not what it once was..so valuations of even abstract assets like Equities would run higher..