DOVE Alert! S&P 500, Gold, Bitcoin Rise After Powell Goes Full DOVE, UST 10Y Yield Falls

Well, I was expecting a little more guidance than Fed Chair Powell gave today at the J-Hole conference. In fact, failing to give a hard date on paring back the balance sheet and raising rates is downright dovish. A regrettable incident.

As a result of Powell’s dovish talk, GOLD, BITCOIN and the S&P500 index rose.

The S&P 500 index rose almost 1% today while the 10Y Treasury yield dropped 4 bps.

Battle Of The Fiats! Bitcoin Hits $50,000 … Again And Backs-off As US Dollar Sinks (What Happened To Bretton Woods?)

Since President Nixon helped take the US off the gold standard, the US Dollar has become FIAT currency. That is, not backed any precious asset such as gold, silver, platinum, etc. What ever happened to the Bretton Woods system?

The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states. The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained its external exchange rates within 1 percent by tying its currency to gold and the ability of the International Monetary Fund (IMF) to bridge temporary imbalances of payments. Also, there was a need to address the lack of cooperation among other countries and to prevent competitive devaluation of the currencies as well.

So much for Bretton Woods. We now live in a FIAT world where The Federal Reserve can print money almost without any limitation.

Enter cryptocurrcies such as Bitcoin and Ethereum.

Bitcoin, the favorite of many, broke through the $50,000 barrier yesterday, only to level off below $50,000 this morning. Ethereum is level after rising yesterday. Meanwhile the US Dollar (the preferred FIAT model of The Federal Reserve) is falling.

Here are some of the cryptos out there, but I only follow Bitcoin and Ethereum.

Since Nixon and dropping off the gold standard, we have seen US Federal debt (and spending) blow out of control with the decline in M2 Money Velocity to its lowest levels.

This should be the new emblem of the US Federal government AND The Federal Reserve.

Fed’s $168.2 Trillion Nightmare That Powell Ignored In Written Testimony Before Senate Banking Committee (Bank Staggering Derivative Exposure)

Yes, Fed Chair Powell gave written testimony before the US Senate Banking Committee. He left out one important bit of information: US banks have $168.2 TRILLION in derivative exposure.

It could be that Chairman Powell had other things on his mind, like reverse repos over $1 trillion and a $8.26 trillion balance sheet.

Inflation Alert! US Producer Prices Come In Hotter Than Expected (+7.8% YoY), Annualized Run Rate Is 12%!

Well, economists were expecting a 7.2% YoY print of the Producer Price Index – Final Demand. But July’s print came in hot … at +7.8% YoY. Compare that with the Core Consumer Price Index YoY of +4.3%.

The month-over-month PPI Final Demand is showing a run rate of 12%! (1% in July x 12 months).