NYSE early this morning.. The most noticeable

NYSE early this morning.. The most noticeable thing is that long-term interest rates are down quite a bit and gold and silver prices are down a lot. Stock prices are flat… Long-term interest rates have fallen a lot… Gold prices are down…and the dollar is strong, as the Japanese yen is weak, the dollar is strong on the other side…and the aftermath of the fall in gold prices seems to contain some expectations of a strong dollar.

It’s hard to figure out the exact reason, but… The easiest way to explain this is that the money flow to gold was excessive. So here you go. The market atmosphere right now is… It’s going to go up no matter what… I need to buy more now. There’s this kind of atmosphere. Like I said in my last essay, I didn’t feel this kind of atmosphere until October 2007 and April 2020, right after COVID, but… What’s different from that time is the experience of going through that time. So shouldn’t you invest more by generating leverage than just generating revenue? Hedge funds generate leverage and buy assets that are likely to rise. These guys are the famous non-bank financial institutions… They borrowed money from the market… I invest with this money. When borrowing, I borrow money from the repo market with my government bonds as collateral… And with that borrowed money, you buy back government bonds and so on, and you borrow more from the repo market with that government bond as collateral, and you can say it’s a structure where you invest with that borrowed money.

Then you have the problem of very large financing for investment in the repo market. Recently, a lot of people have been asking me questions that the SOFR rate in the United States is quite high. With more financing in the repo market… Should I join the investment craze with that… Won’t Interest Rates Go Up in the Repo Market? Rather than the Fed’s Tackling of Quantitative Tightening…. Quantitative tightening prevents the bank’s reserves from shrinking. Overinvestment by non-banking financial institutions has been concentrated… As the price of gold cracks… a picture of such leverage being liquidated… I think that can be interpreted as such a picture. For your information, last week… I remember one big drop in the coin market. Risk from leveraged investments… Let’s think about this.

Another interpretation is that expectations for long-term inflation are likely to decrease. To cut short-term benchmark interest rates… Long-term interest rates are rising… That’s what happened. Lowering short-term interest rates… Market concerns that it’s stimulating long-term inflation expectations and increasing price instability… This has led to a decline in short-term interest rates and a rise in long-term inflation and a rise in gold prices in terms of hedging against long-term inflation. In fact, gold was the most significant asset in the 70s during the period of interpersonal inflation, but if you look at today’s market… Long-term interest rates have dropped quite a bit… Gold and silver prices have fallen significantly. This is what happens when inflation expectations decrease…

Can this affect the financial market or the real economy… We need to pay attention to why inflation expectations are falling. If the U.S. is slowing down faster than we think… If the drop in demand from low-income families is fast and inflation expectations are low… Concerns about slowing growth may affect other assets. Of course, you can’t generalize it by looking at a single day of phenomenon. However, if this trend continues in the future… The idea that gold is a litmus test for easing inflation expectations could be more convincing.

Bank of England Governor Bailey has issued another warning about the risks of non-banking financial institutions. I don’t know, but so does Lagarde, and so does Bailey… Something seems to be concerned about overheating on this side. Let’s get back to this a little bit tomorrow. Essay line. Thank you.