The weekly review...

By the end of each week, I post a comment about a financial topic. The views which are reflected in this blog are mine and they are not supposed to constitute financial advices. Do what you think is good for yourself. Build your knowledge, and take advice where necessary.
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This article is continuing on the theme of understanding what money is made of, and what it has in store for us all in the short, medium and longer term.

In our new world, every propaganda-economist has its own version of the upcoming -flation wave. It is hard to decipher and make up one's mind about it.

Let's continue to dig deeper...

Considering the seismic changes happening in our world, my main focus right now is this: how shall I navigate the next 2-3 years and get out of the Covid 19 tunnel in as good a shape as I was when I entered it?

It may not look too ambitious to only aspire for a relatively stable financial situation, but this is the new world we live in. Survival first! Opportunities second...

To achieve this relative safety in a world of collapsing income, I need my macro decisions to be surfing on the real trends. For this, I need to dig deeper and understand money even more than I ever did before...

Hey my friend! Looks like I have spent the week in the washing machine once more! And by the look of it, I am not the only one.

No frankly, I am starting to doubt that I really know what money is. Well, I think I knew what it was. But I wonder if I still know what it has become or what it will become...

Let's open the money box once more!

We all know there will never be a flying pig. But could there be a flying whale? I assure you, when big whales start flying, the world will be upside down. Hey, but the world already is upside down 🙃 Then there must be flying whales somewhere...

Please don't challenge my logic so fast. Join me in the search of the flying whales...

How long do you have to wait before the dead patient has to be pronounced dead for certainty? In the week of the Corona Virus taking world stage, it's a bit of a bad taste question, but I have to raise it, because in the financial world, I see two dead patients, and a line of incoming moribund ones. In the financial world, death can be excruciatingly slow, so in doubt, I preferred to call them Zombies. Let's dig deeper into the zombies who are responsible for creating money.

There is something called Blue Monday, and this year, it hit us on January 20. Mind you, the last 3 weeks, I have done everything in my power to keep you focused, in a good mental state, and plan for the next decade (not just the next 10 days) so that you can avoid Blue Monday, and then the long drag until Easter. So, if you are with me and focused, let's make the most of our good mindset and get some insight into the world financial equation. Errr... if you are already in Blue Monday spirit, I am not sure if what's coming next is the right medicine!

This time I got it wrong. I bet against Mr Market and the Fed. It's never a good idea to bet against these monsters... I am probably not the only one who got it wrong, but nevertheless... it pisses me off! All signals except one or two are saying that a recession is coming, and that it's time to go risk-off. But the remaining one or two are stubborn and powerful. They have all the money in the world: they print it! So what's next? I'm going to open the crystal ball up to end 2020...

With QE and the race to the bottom, there is so much money all around us, that it looks like it is worth nothing. Well, to be exact, in some quarters it is worth nothing, in others it is still costly. One would expect that after the 2008-2018 Greek debacle, at a time when the country had to pay up to 37% interest to borrow money, it would still be very costly for Greece to raise money in 2019. Mind you, they have been in austerity mode for a decade and still have debt repayment scheduled until 2060. And who knows if they will not default a few more times before? Well well, the world has changed: Greece is a safe bet! Time to assess if I am safe too...

Looks like one trillion dollar does not buy much these days. I am not talking about Zimbabwe dollars, but King of all currencies, the USD. Yes, this is another inflation, deflation and manipulation story. But how could it be different? The Fed just announced a $60b per month repurchase program. That level of money printing would pay the Brexit divorce bill in 2 weeks... For the first time, I am going to start using emojis... 🤦

I learned two new concepts this week. The first one: we are in an earning recession, which means that the average of the most powerful public US companies (SPX again!) have seen their profit go down for two quarters in a row. The second one: the FED mandate, which until now was known to be "to promote effectively the goals of maximum employment, stable prices, and moderate long term interest rates" seems to have wobbled. The FED did lower the interest rates (by 0.25%) this week, announcing that it did so because of the big companies earning recession... Hello???

2019 Sep 14
money Whirlpool!

This week, the European Central Bank lowered its interest rate. Again... From previously -0.4% to now -0.5%. Those on a variable mortgage indexed on Euribor are having a laugh and a free mortgage... What more? The ECB also gave guidance that until probably at least mid-2020, the rates will stay the same or be lower... Meanwhile, the King of USA is wondering why the FED does not compete on this race to the bottom...

A bank in Denmark is offering negative rate mortgages. What does it mean? You take up a 10 year fix rate mortgage with them, and they pay you 0.5% per year for the privilege of asking them money. They also have in store a 20 years mortgage for 0% interest. Yes, free money over 20 years...