After completing a degree in Geophysics, Bob worked in mining exploration. Inspired by the mistake of making money on his first trade, he joined an investment dealer. Historical research led to metals forecasting for large mining companies. This segued into providing independent research to ...
more After completing a degree in Geophysics, Bob worked in mining exploration. Inspired by the mistake of making money on his first trade, he joined an investment dealer. Historical research led to metals forecasting for large mining companies. This segued into providing independent research to financial institutions. In 1981, the concept that speculation would shift from tangible assets to financial assets was controversial. That was phrased as “No matter how much the Fed prints, stocks will outperform commodities”. Stocks are still outperforming, but the next major transition will be described as “No matter how much the Fed tries to print, cash will outperform tangible and financial assets”. It has to do with the velocity of money. Bob has had articles published in many outlets and has addressed financial forums in a number of countries.
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Market Valuation, Inflation And Treasury Yields - Clues From The Past
Hi Jill
You could stretch out your history to include all of the great financial bubbles. After the banking reform of the 1840s, the senior central bank (then, BoE) was allowed to liberally change administered rates. At times of great excitement beginning with the 1873 Bubble the senior central bank (now the Fed) has followed changes in short-dated market rates of interest. T-bills or equivalent. By many months.
For example, the 3-month bill increased to 5% in May 1929 and turned down in that fateful June. The first Fed cut on a normal post-bubble contraction was in October.
The 3-month reached 1.18% a few weeks ago and has declined to 1.06%, but has yet to break down.
There is an old saying in physics that if you keep your database short enough, it will fit your theory.
Both interventionist and "conservative" economists work with a short database.
Best,
Bob