What’s money worth?

“The interest rate-sensitive S&P 500 Banks Index surged 2.5%, following a rise in U.S. Treasury yields.” Reuters September 5, 2019

For anyone who didn’t know: all that money safely buried in bonds took bond yields and stock markets down; when it returned to stocks, bond yields went up. Money buying bonds raises their price and lowers their yields: interest rates. Selling bonds to buy things like stocks lowers the price of bonds and raises interest rates.

Gold stocks also went down with the price of bonds. Since people buy gold when they are sceptical of money’s worth, will they resort to barter if money’s value is erased?

Interest Rates & World Oil

I’d forgotten about a piece that I’d written in October 2017 about BNN’s no longer showing daily interest rate fluctuations and the Loonie’s value in  U.S. dollars. Back then the Loonie’s value in green backs was 80 cents with world oil hovering about $50 a barrel.

But since October 2017 Canada’s BNN has become Bloomberg’s BNN, and the numbers that stopped appearing then are back. These days, November 9 -11, 2018; the Loonie has fallen from 80 cents U.S. to less than 77 cents even when oil had risen to over $70 a barrel. But also since then the U.S., Canada’s most important importer of Tar Sands oil has been reported to have become a net exporter of oil, perhaps helped by oil prices recent increase to above $70.

Since the threat of increased interest rates in North America, the price of gold has remained within the $1225-1235 range; and I continue to watch the mostly stationary price of gold  to confirm the trepidation central bankers must be experiencing about putting overnight interest rates back above the negligible 2% rate.

1 CAD = 0.802969 USD(6:00 am, October 19,2017)

BNN has stopped providing interest rate numbers, and in the past 3 days the Loonie value in US dollars.

To a non- finance person, interest rate and Canada/US dollar amounts are the most important barometers of our Western economies.

Gold and oil prices are still given: The fluctuating value of gold usually indicates interest rate fluctuations. When the price of gold rises, interest rates decline. When the price of oil rises the value of Canada’s currency trends higher. In recent weeks I’ve read oil use had reached a 2 year high reflected in a steady over $50. per barrel world price. Correspondingly the Loonie rose from about 74 cents USD to 82 cents then fell back to about 80 cents as oil stopped its rise remaining over $50 per barrel while Canada’s Loonie has been hovering around 80 cents

Today is December 9,2017.

Shortly after my complaint that Canada U.S. currency numbers had not appeared on BNN for several days the currency numbers reappeared. But my favorites, the interest rate figures, have not; so I have to rely on fluctuations in the gold price to guess which direction rates are heading. For some time gold has hovered around $ 1270. an ounce, and rates have stayed correspondingly steady. Yesterday the gold price seemed to fall bellow what its been for weeks now. I haven’t bothered to find yesterday’s interest rate figures online, presuming there likely will not be much change since Canada’s central bank just decided not to raise overnight rates above 1%, which likely means that all western world central bankers have agreed to keep rates as they are until something happens in the bond market.

 

Gold, Bread and The Bible

With journalists attention to Mr. Trump’s favourite Bible passage in mind and the gold price stagnating as bond yields keep falling even after the first federal funds rate rise in some years, a Bible passage from Genesis 47,15 about the devaluation of money comes to mind.

And when money failed in the land of Egypt, and in the land of Canaan, all of the Egyptians came unto Joseph and said, Give us bread: for why should we die in thy presence? For the money faileth.

Mr. Draghi’s Euro Q.E.

January 22,2015 Well they were saying a Q.E. in Europe could take up where the Q.E. in America stopped. I guess they were right as Europe will be purchasing 50 billion Euros a month till 2016 or when inflation appears, probably never: Deflation ( CPI-wise if you believe in the CPI things are cheap; if you count what you spend they are increasingly expensive) has been just around the corner since Mr. Obama became president in 2008.

November 7, 2014 Today was one more eventful day in the investment world; after several days of bond yields tip toeing higher after falling back to QE levels just about when the U.S. Federal reserve announced an end to its QE,  buying its own U.S. government bonds; then rumours of  a possible Europe QE program with Japan leading the way and the Dow Jones again reaching toward record heights, just after Warren Buffet lost 2 billion bucks on Coke and IBM. And a few days ago the  Arabian OPEC powerhouse dropped its price to the U.S.A..Then  today November 7 maybe 2.5 weeks since what was written below on October 21, returns on U.S. bonds suddenly fell back from their tepid climb; and  gradually  dwindling gold prices just as startlingly came back to life because someone heard Ms. Yellen say that Europe should do what’s necessary to keep its economy alive, maybe like Japan is doing  devaluing its Yen to compete better with Europe and Canada maybe, trying to keep wages and prices lower to sell stuff to its biggest trading partner the U.S.A , and then of course there’s China with whom we all compete. October 21, 2014; am. Today, October 21, 2014, after dwelling on Brendan Brown’s notion, “Q.E infinity”, in his 2014 book EURO CRASH How Asset Price Inflation Destroys the Wealth of Nations I might assume that Mr. Bernanke who according to Brown appears to have contrived “Q.E. infinity” to keep rates low was keeping his “cards close to his chest”on June 19, 2013 knowing that rates could not be permanently affected by recent investor actions in the bond market because he had stifled the so called natural impulses of the market and its “invisible hand” with his “Q.E infinity”. And with North American interest rates having again fallen precipitously with stock markets in America and Europe nervously gyrating, and some business commentators rumouring the unexpected apprehensiveness of some Federal Reserve governors about ending the Reserve’s bond purchases this October, there are whisperings of a Q.E. # 4. And at about 2:00 pm. with stock markets reversing last weeks plunge with vigorous upward rises, one U.S. commentator said that present stock improvements  could be attributed to rumours that Europe may be about to begin its own version of Q. E. (Quantitative Easing/money manufacturing) program.

One More QE Maybe?

November 7, 2014

Today was one more eventful day in the investment world; after several days of bond yields tip toeing higher after falling back to QE levels just about when the U.S. Federal reserve announced an end to its QE,  buying its own U.S. government bonds; then rumours of  a possible Europe QE program with Japan leading the way and the Dow Jones again reaching toward record heights, just after Warren Buffet lost 2 billion bucks on Coke and IBM. And a few days ago the  Arabian OPEC powerhouse dropped its price to the U.S.A..Then  today November 7 maybe 2.5 weeks since what was written below on October 21, returns on U.S. bonds suddenly fell back from their tepid climb; and  gradually  dwindling gold prices just as startlingly came back to life because someone heard Ms. Yellen say that Europe should do what’s necessary to keep its economy alive, maybe like Japan is doing that’s devaluing the Yen to compete better with Europe and Canada maybe, trying to keep wages lower to sell stuff to its biggest trading partner the U.S.A. , and then of course there’s China with whom we all compete.

October 21, 2014; am.

Today, October 21, 2014, after dwelling on Brendan Brown’s notion, “Q.E infinity”, in his 2014 book EURO CRASH How Asset Price Inflation Destroys the Wealth of Nations I might assume that Mr. Bernanke who according to Brown appears to have contrived “Q.E. infinity” to keep rates low was keeping his “cards close to his chest”on June 19, 2013 knowing that rates could not be permanently affected by recent investor actions in the bond market because he had stifled the so called natural impulses of the market and its “invisible hand” with his “Q.E infinity”.

And with North American interest rates having again fallen precipitously with stock markets in America and Europe nervously gyrating, and some business commentators rumouring the unexpected apprehensiveness of some Federal Reserve governors about ending the Reserve’s bond purchases this October, there are whisperings of a Q.E. # 4.

And at about 2:00 pm. with stock markets reversing last weeks plunge with vigorous upward rises, one U.S. commentator said that present stock improvements  could be attributed to rumours that Europe may be about to begin its own version of Q. E. (Quantitative Easing/money manufacturing) program.