Falling dollar, rising gold & crypto blow up.
Macro Perspectives
We've talked about the falling dollar, which began with an outsized decline on Friday.
Again, that decline even outpaced the magnitude associated with two major central bank interventions of the past two months (Bank of England and Bank of Japan).
Yesterday we talked about some reasons why the dollar could be in the early stages of a trend change (to move lower). The move lower in the dollar has given some life to gold (which typically moves inverse to the dollar). Let's take a look at the chart ...
As you can see, after testing the low $1600s three times, gold failed to break down, and has now broken a descending trendline (a bullish break).
What else is going on with gold?
Central banks around the world stockpiled gold in the third quarter, with the highest quarterly demand on records dating back to 2000. For the year, central banks are on pace to accumulate the most gold since 1967.
What does this portend?
Even with the high likelihood of gridlock coming to D.C., which should bring a counterforce to the stag-flationary economic agenda of the White House, the country and the world have an unsustainable sovereign debt burden to overcome - the fiat currency system will continue to be in the crosshairs. As we know, over 60 global central banks (the BIS) are already at some stage of considering a central bank-backed digital currency.
With this in mind, when surveyed, central banks say their accumulation of gold, is with the goal of getting to their "historical positioning" in gold as a reserve asset.
What happened with FTX (broad strokes):
Last week concerns mounted following a CoinDesk report on ties between SBF's trading and investment fund, Alameda Research, and the exchange FTX.
It turns out, FTX makes its own money and called it FTT token. SBF keeps most of it, and sells some to the market. FTX then uses their remaining FTT tokens as collateral for actual loans.
And then people remember that FTT tokens arnt actually real money.
PS: At the Gryning Times my focus is to be agnostic to what the markets seem to be or what people say they are, instead focussing on the things that matter; data, numbers and facts.
Readers of the publication will note that we took a position in BITO 0.00%↑ - the bitcoin etf - highlighted in this Macro Perspectives.
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