S & P 500Enclosed is the chart of the S&P 500 for your understanding. Trading View does not provide a Candle Stick chart as per the US indice policies. The chart is self explainatory as to where we are headed and the BOTTOM formation as per Me
Economy
Fed Net LiquidityNet Liquidity: It's calculated as:
⬆️ Size of the Fed's Balance Sheet (WALCL)
⬇️ Minus how much of that has been sucked out into the Treasury (WTREGEN)
⬇️ Minus how much has been sucked out into Reverse Repo (RRPONTSYD)
Apparently predicts direction of SP500 with high accuracy
OUT of the BOX chart !!!India Inflation has formed triple top @7.88 , as visible on charts
which signifies that inflation could come down.
Also, RSI divergence is visible which indicates loss in strength
from resistance level and suggest retracement in inflation.
Below 5.81 inflation would be optimum and will favor stock market
and economy.
US Inflation Rate: On verge of Falling trendline BOUS inflation rate is on the verge of falling trendline BO. A rejection from there can bring some relief for equity market. Need to watch closely.
stock remake for marketerslay out an internal profit that is baste on profit markets in the US and around the boarder that is located closer to oil markets and retail markets.
Will be there any Economic Recession in year 2022-2023 ????These vertical rectangles are RECESSION PERIODS occurred during last 50 years, this happened whenever "10- Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity" is negative or at Zero
Will the History repeat once again?
Interest rate curve changesThe two sets of curve structures bounded by a one-year period deviate significantly, and the real interest rate also stands at the limit of zero. If long-term nominal interest rates sag (falling inflation expectations), the situation will be worse than it is now
US Unemployment Analysis Feb 2021Peaks on SPX are marked seems when ever the US employment rate falls and comes close to zero its time for markets to FALL.
PART 1/2 Connecting the dots: QE, MMT and inflation Inflation is a tough one to get your head around, and QE, MMT and fiscal spending is popular terms these days. I will try to connect the dots short and sharp in two posts. I’ll use gold as an inflation metric, i.e. higher gold price equals higher inflation.
First, "inflation is always and everywhere a monetary phenomenon", Milton Friedman once said.
There are many inflation terms (e.g. cost pull and demand pull), but in terms of Friedman, real inflation must come from a rise in money.
Where do money come from?
The only entity that can print US dollars is the US government, but do US dollars have to come from the government?
During the great inflation, government spending was low, but the effective Federal funds rate went from 3% to almost 20% in order to deal with the inflation.
If government spending was low, and interest rates (IR) was high, how could the money be flooding the streets?
The answer is the private banking system.
QE are bank reserves the private banks CAN use in order to make new loans (US dollars). I write can in capital letters, because that’s the important point. If the private banks don’t use the banks reserves to make new loans, every single dollar of bank reserves printed by the Federal Reserve never enter the real economy, and, hence, can’t be inflationary.
Bottom line: QE can be inflationary but is NOT as long as the private banks don’t want to take on more risk and make new loans (US dollars).
If the private banks can’t make the US dollars needed, MMT is a popular solution these days.
MMT brings the money creation from the private banks back to the US government. If MMT is a good or a bad idea is not the purpose of this post, but put simple, this is what you need to know:
MMT is a response to the private banks not making sufficient US dollars the global economy (USD = world reserve currency) needs in order to grow.
Summary:
QE is potentially inflationary but it’s not as long as the private banks don’t use the bank reserves to make US dollars. MMT is the response to the insufficient flows of US dollars from the private banking system.
US Bond yield topping. LONG US bondsUS bond yields should start falling soon for many years as monthly chart shows. Time to buy US bonds.
