Correlation Economics Backup

After a small hiatus in 2017, the gold repatriation continued in January 2018.

In a previous article I mentioned that the U.S. deficit was going to spiral out of control and that inflationary pressures will emerge, putting pressure on the U.S. dollar. Well, it just got worse with the news that Trump is going to impose import tariffs on steel (25%) and aluminum (10%). I will make the case that this will only increase U.S. deficits and be detrimental to GDP growth. When import tariffs are imposed, basic economics tells us that in all cases, the price of the good will increase. Foreigners will sell less of the good to the U.S and domestic production of the good will increase. Go here to read the analysis .

I'm sorry but I need to highlight this event. China, you disappoint me.

Uranium seems to be the latest thing in investment land. I can agree with that, but it's much too soon. I would wait 2 years.

On February 14th, 2018, the consumer price index (CPI) came in higher than expected. It posted 2.1% instead of 1.9%. 10 year bond yields surged to 3% on this news and the U.S. dollar fell. It will be interesting to see how the Federal Reserve will react to this news in March's FOMC meeting. Will it increase interest rates on this higher inflation data, or will it hold rates? I believe the Federal Reserve is not able to raise rates much more and I will tell you why. Read further here .

Correlations are very important and in bitcoin, this is essential. People don't like transaction fees. When transaction fees go to $50/transaction, people will stop using bitcoin. Transactions will go down and the bitcoin price will go down. So what do you do then? You buy bitcoin when transaction fees are low and you sell bitcoin when transaction fees are high. It's that simple. I would only buy bitcoin when transaction fees are in the $10/transaction. A sane person wouldn't want to pay more than $10/transaction.

This page is created to monitor the Federal Reserve Bank's solvency. Very nice article on the Federal Reserve and its interest payments to the banks. http://www.businessinsider.com/fed-paid-banks-30-billion-on-excess-reserves-for-2017-2018-1?international=true&r=US&IR=T One wonders what will happen when yields go up and the FRB unwinds its balance sheet in this environment. Will it have enough revenue to pay these interests on excess reserves, especially with higher fed funds rates. Will it have enough money left to remit to the treasury? We already see these remittances to the treasury going down since 2015. More debt will be issued once the treasury is empty again. By law, the Fed is only allowed to have 5% ROI on its investments per year  (at 20:00 mark), the rest needs to be remitted to the Treasury. Once the Fed has a negative ROI, the Treasury needs to pay for the Fed's losses. Remittances can be found here too: https://research.stlouisfed.org/datatrends/usfd/pag...