BofA FX Strategist breaks down the state of G10 Currencies

10/16/2014 Portland, Oregon – Pop in your mints…

Yesterday we had the pleasure of hearing a presentation by John Shin, the G10 FX Strategist at Bank of America.  Mr. Shin is highly intelligent and a deft presenter, as one would expect from someone of his caliber (Harvard PhD in Econ, etc.)  He also managed to make the material, essentially a rehash of Central Bank rate policy over the past several years through today, somewhat entertaining and relevant.

One of the big takeaways from the presentation was that the ECB has not been performing well in its role when compared to the FED, Bank of England, and Bank of Japan, against which it is often compared.  Mr. Shin acknowledged that in many cases their hands are tied as, while they have the experience, they seem to struggle with their mandate, to maintain a stable currency, as they are vilified in a world where other Central Banks have taken stimulus to extremes once thought unimaginable.

The Euro is a very important currency.  The Euro and the ECB as its managing institution are also very young relative to their counterparts.  Making their job even more difficult is the fact that they are managing the currency for the Eurozone, whose internal fiscal and market dynamics at time defy analysis if not logic.  Here at The Mint, we recognize that the ECB is simply making the best of what’s around as they constantly mend the currency union that holds what is at times a tense economic union together.

Mr. Shin also spoke at length about the Unemployment rate in the US and the associated workforce participation rate (roughly 64%) which has rapidly declined due to, according to Shin, a roughly 50/50 mix of demographic and economic factors.  He also put the workforce participation rate in perspective, as it is still above where it was in the 1960’s, roughly 59.5%.

Generally, he was bullish on the US Economy and the US Dollar, and had pegged his expectations for FED rate increases to mid-next year.  It will be interesting to see if his call plays out.

After the presentation was finished, we asked him for a nugget of advice in terms of what his one Key Indicator was to keep a pulse on economic activity.  He said that, while they track many indicators, as one would expect, there is none that speaks more to the contemporaneous state of the US economy than the monthly jobs numbers.  Concretely, when they top 200,000, the economy is in good shape, anything below that is a bad thing in his view.  He said no other data point correlates so well with other economic growth indicators.

So there you have it, the dollar will remain strong and as long as the economy adds 200,000 jobs or more per month, all is well from the perspective of one of B of A’s best and brightest.

Creidt Sui

Mr. Shin is in charge of the “World at a Glance,” which is their flagship publication which highlights the bank’s key forecasts in FX, rates, and commodities.  An extremely interesting read put together by some of the best in the business.

Will his forecasts on FED rate increases come to pass in mid-2015?  If today’s market action is any indication, low rates could be with us for a long time to come.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Key Indicators for October 16, 2014

Copper Price per Lb: $2.98
Oil Price per Barrel (WTI):  $83.02

Corn Price per Bushel:  $3.52
10 Yr US Treasury Bond:  2.15%
Bitcoin price in US:  $391.63
FED Target Rate:  0.09%
Gold Price Per Ounce:  $1,239

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  5.9%
Inflation Rate (CPI):   -0.2%
Dow Jones Industrial Average:  16,117
M1 Monetary Base:  $2,815,400,000,000

M2 Monetary Base:  $11,513,000,000,000

Positive Money UK is on the right track

10/10/2014 Portland, Oregon – Pop in your mints…

For some time we have followed a group known as Positive Money UK on Twitter.  They seem to be among the few people/groups that have a decent comprehension of the flaws in what we call the insane debt based monetary system in which the inhabitants of the earth are either coerced or compelled to live by.  They describe themselves as “a movement to democratise money and banking so it works for society and not against it.”

We were reminded of this by one of their tweets today:

Positive Money Tweet

The alien meme sums up what we have been driving at for some time now here at The Mint.  We tend to focus on the acceleration of the damage that humankind causes to nature as the nasty side effect of using debt as money, but it is well noted in other corners that indeed, many of the distortions in relationships between persons and nations have the concept of extinguishing debt as their root.

The video which is linked to in the above Tweet from Positive Money UK is presented as a public service below, it does a nice job of showing how the only way to create money in our insane, debt based monetary system, is to go deeper into debt or have someone else go into debt.

While the video is spot on in terms of money creation, they present only half of the solution (which we find is common in many monetary reform circles, namely Bitcoin).  The second half that is too often ignored is that 1) money, as a concept, necessarily will take on many forms in the world and 2) whatever is used as money by a majority will necessarily require an associated debt market to successfully operate for any length of time (the lack of a viable debt market is killing Bitcoin).  This is the great supposed advantage of using debt in the form of Central Bank notes as money, infinite debt markets = infinite liquidity, meaning there is always money available.  It is this advantage that any viable monetary reform must include, or else it is doomed from the start.

On their website, Positive Money UK points out that “Only 1 in 10 MPs understand that 97% of money is created by banks.”  As the English are generally cleverer than Americans, we would imagine the ratio in the governing bodies on the US side of the pond to be even lower.  If you need proof of this, just watch the next Senate Banking Committee session on C-Span.

Nobody seems to get that today, circa 2014, money and debt are the SAME THING.  What passes as money today are nothing more than liabilities of Central Banks.  This is a worldwide phenomenon, and the effects are profound.

Money is a concept that attaches itself to certain real world things in various forms.  Credit is another concept which attaches itself to various agreements.  They are the antithesis of each other.  Most people generally understand this and spend a good deal of their time working or causing others to work in order to attain a reasonable balance between the two on their ledgers, regardless of the size.

However, as the above video partially illustrates, most people are wrong, the only way to “make money” is to “make debt.”  This is causing SEVERE imbalances in the natural world as the activities of mankind continue with an unconscious disregard for the effects of the real world.

The effects on the real world are this:  There is an inordinate amount of fallow land left unattended while an increasing share of mankind passes time in urban settings, with their own productive capacity squarely aligned, day in, day out, in conflict with the needs of the natural world.

The irony is that many have taken note of the dire state of affairs of nature (read Climate Change, etc.) and then misdiagnose the cause.  They clamor for more “money” to solve problems that have come about as an indirect result of the creation of more “money.”

Humankind was never meant to live under that shadow of such an overabundance of credit.  The removal of limits on credit creation has effectively removed the natural governor of the activities of man, the need to create real, free market money, making certain that debts are settled in terms of real goods which are demanded by a free market economy.  The return to this natural governor on human activity is indispensable if humankind is to even begin to address climate change and world peace.

The return to this natural governor will be painful, but it is inevitable, and the more one can prepare now to operate in a world where money and credit operate in their appropriate the capacities and take their appropriate places in a balanced economy, the better.

The world is headed, kicking and screaming, towards a forced monetary reset, and things will be much different than they are now.

We applaud the efforts of Positive Money UK, for they are on the right track.  You too can follow them on Twitter or YouTube and learn more about this fascinating and important subject that, by our own reckoning, only one in a million comprehend.  Will that one be you?

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Key Indicators for October 10, 2014

Copper Price per Lb: $3.04
Oil Price per Barrel (WTI):  $85.82

Corn Price per Bushel:  $3.34
10 Yr US Treasury Bond:  2.31%
Bitcoin price in US:  $360.13
FED Target Rate:  0.08%
Gold Price Per Ounce:  $1,223

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  5.9%
Inflation Rate (CPI):   -0.2%
Dow Jones Industrial Average:  16,544
M1 Monetary Base:  $2,969,100,000,000

M2 Monetary Base:  $11,407,100,000,000

5.9% and why it doesn’t matter

10/3/2014 Portland, Oregon – Pop in your mints…

Today the BLS reported that payrolls grew in September and that the stated unemployment rate dropped to 5.9%.  They also published the labor force participation at 62.7%.  The handy chart below from the folks at Business Insider shows how steeply labor force participation has dropped over the past five years.

Labor Participation Courtesy of BI
Labor Participation Courtesy of BI

Labor Market Participation aside, the 5.9% unemployment is exciting for banks.  On one hand, it can be seen as a sign that more people are working and theoretically becoming creditworthy.  This is big because consumers with deposits are cherished in the Basel III framework that they are painfully working their investment ladders into.

On the other hand, it is seen as just high enough that the Federal Reserve will not raise short term interest rates for fear of “derailing the recovery” or whatever phrase Janet Yellen chooses to employ in her latest effort to mask the brutal fact that they are continuing to provide money free of charge to a painfully inept banking cartel.

While much will be written about today’s “Goldilocks” job report, it matters not in terms of Fed policy.  The Fed will continue to offer money free to banks until they are certain that Basel policy reforms will not inadvertantly cause (rather than prevent, as they are designed to do) the financial crisis.  Meanwhile, in the real world, the cost of labor, meaning the cost of hiring someone who can actually perform a specific task, is about to skyrocket.

The reason for this is that there remain severe imbalances in the labor market caused by recent advances in technology, namely cloud based administrative services and logistics, which are now colliding with a relative decline in the recent productivity gain that said technology was providing.  While large productivity gains having been the norm, there is soon to be a lack of persons who have the requisite skills to run such systems efficiently, which means that those productivity gains will at a minimum not continue and may even be lost.

There is also another labor undercurrent that the BLS data does not capture.  This is the large scale disruption of entire industries that the cloud and logistics revolution is enabling.

Indeed, there is much more to the labor market than a tidy percentage point can express, as nearly five years of ZIRP is pushing the division of labor to new extremes.  Employers, Employees, and the BLS may soon become archaic terms, as American Society moves towards outsourcing on steroids.

Today’s 5.9% is little more than bad information, unless of course, you are a banker, in which case it means that the Goldilocks days are here again, and the Fed’s subsidy, a license to strip mine the earth that is provided on the backs of its inhabitants and nature herself, will continue until further notice.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Key Indicators for October 3, 2014

Copper Price per Lb: $3.04
Oil Price per Barrel (WTI):  $89.68

Corn Price per Bushel:  $3.23
10 Yr US Treasury Bond:  2.45%
Bitcoin price in US:  $377.60
FED Target Rate:  0.09%
Gold Price Per Ounce:  $1,192

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  5.9%
Inflation Rate (CPI):   -0.2%
Dow Jones Industrial Average:  17,015
M1 Monetary Base:  $2,833,300,000,000

M2 Monetary Base:  $11,418,000,000,000

Entrevista con Mel Lagomasino de WE Family Offices

Hoy presentamos The Mint en Español con motivo de compartir una entrevista muy importante con Mel Lagomasino, una mujer que sabe algo de inversiones y la gestión de grandes patrimonios.

Ya puedes leer más acerca de los credenciales impresionantes de Mel Lagomasino en la página de sus servicios de Family Office:

WE Family Offices

En la entrevista que se puede ver en versión complete abajo, Mel abarca temas interesantes con franqueza. Entre ellos:

-Como preservar el dinero, como ganar el dinero, y como separar la vida personal de la vida empresarial de la familia.

-Lo que es un Mapping y por que es importante

-La diferencia entre ahorrar e invertir

Hay también unas frases y pautas claves compartidas, por ejemplo:

– Diversificar activos si uno quiere preservar el capital

-Los grandes patrimonios se ganan por la concentración, y se conservan por la diversificación.

-Es importante reflexionar en donde uno quiere llegar y cuando con su patrimonio y imponer una estrategia de inversión de acuerdo con este deseo.  Una vez impuesta, es aún más importante mantener la estrategia pese a los cambios temporales en el mercado.

-Que tengo?  Que es lo que me cuesta dinero? Que es lo que me gana dinero?

-Hay que separar lo acumulado por cubos e asignarlos un valor monetario.

-Empresa operativa = Crecer el capital

-Empresa patrimonial = Conservar el capital acumulado

Es importante la distinción  entre que tipo de empresa conviene porque hay que separar los intereses de los miembros de la familia quienes quieren seguir creciendo el capital de los a quienes no tienen interés en aportar al negocio.

-Hay que entender bien a los asuntos financieros y fiscales.

-Establecer la sucesión y comunicar/conversarlo.  La conexión entre el dinero y el amor está muy fuerte.

La entrevista termina con las reglas de oro de Mel Lagomasino:

-Ten un propósito

-No invierte en algo que no entiendes

-Entiende las emociones involucradas

-Maneja los costos que se pueden comer la rentabilidad

La entrevista reveladora, “Invertir: ¿Por Dónde Empezar?” se puede ver a continuación en YouTube.  Disfruta de la entrevista e intenta poner en práctica algunos de sus consejos. Sobre todo, irespectivo del tamaño de tu patrimonio, comienza a vivir e invertir bien!

 

IT’S ROSH HASHANAH 5775, IS YOUR LAMP LIT?

Shana Tova!  Today marks the beginning of the Jewish high holiday Rosh Hashanah, a celebration of the new year, a celebration of the creation of the world.  Once again, we pause and reflect on what has been, what is, and most importantly, what is to come.

With each new year comes a deeper understanding of what is occurring in the world.  This understanding is a gift from God, as we have all been given a unique dose of both wisdom and perspective.  As Rosh Hashanah 5775 is upon us, God is calling each and every one of us to use the wisdom and perspective he has given us to carry on in our unique calling.

This year it has been given to us to explore quantam physics, and its how it explains any number of phenomena, such as prayer and eternity, which are often dismissed by natural science.  It is a call to believe and walk in faith and courage.

It has also been given to us to present the healing miracles of Jesus presented in the Gospel of Luke, during the first ten weeks of 2015 on the Gregorian calendar.

It is now time to remind ourselves why Rosh Hashanah is especially important for those of us who believe that Jesus of Nazareth is the promised Messiah.

The Feast of Trumpets and the Messiah’s Return

We are convinced that the Messiah, Jesus, is returning. We are equally convinced that it has not been given to any man to know the exact time of his return.

What we do know is that we will know the season of his return. The interpretations which we have heard of Jesus’s declaration recorded in Matthew 24:36 generally center around the premise that some sort of series of great catastrophes will be unfolding and a series of signs will be in some stage of fulfillment, implying that these things will mark the season of Jesus’s return.

Here at The Mint, we subscribe to a much simpler and more profound understanding of this scripture, drawn from an understanding of the Jewish wedding ceremony. Jesus will arrive during the fall season in the Northern Hemisphere.

In fact, based on the timing of His death and resurrection, the Passover, we believe that His triumphant return will logically take place over Rosh Hashanah. The celebrated Feast of Trumpets.

Feast of trumpets by Aleksander Gierymski (1850–1901): Painting of Hasidic Jews performing tashlikh (ritual washing away of sins) on Rosh Hashanah, placed on the banks of the Vistula River in Warsaw.
Feast of trumpets by Aleksander Gierymski (1850–1901): Painting of Hasidic Jews performing tashlikh (ritual washing away of sins) on Rosh Hashanah, placed on the banks of the Vistula River in Warsaw.

Not necessarily this fall, mind you. For it is impossible to know for certain. If one were to attempt to pick a specific year, the logical choices would be one of the upcoming Jubilee years, 2018 (starting on Rosh Hashanah 2017 on the Gregorian calendar) or 2068, or the final year of the 6000 year Jewish Calendar, 2240.

Yet it could be tomorrow, or the next day, as Rosh Hashanah has the element of uncertainty as to precisely when the new moon occurs. This detail fits nicely with Jesus’s declaration that we would not know the day or time.

With all of the things that are happening in the world, many have begun to speculate that the end is nigh.

Clearly, the end is always nigh, and calamities such as the ones humanity is currently suffering have always taken place to some degree ever since mankind chose to disobey God and turn their back on their Creator.

Today, with billions of us on the planet, these calamities are multiplied to a staggering degree. The good news is that God’s grace and mercy are experienced in abundance as well, and this will overcome all suffering and calamity as He daily establishes His Kingdom within and amongst us.

Rosh Hashanah may be the most important and least observed/understood holiday for anyone who is not Jewish.  However, what occurs over the next nine days will set the tone for the coming year.  They occurrences are of such magnitude that the Jewish title, the “days of awe,” may be the only appropriate descriptor.

The following is an excerpt from our teaching last year on the sixth sign performed by Jesus that is recorded in the Gospel of John, which took place during this season some 2000 years ago.

Sukkot and the days of awe

Under these circumstances, Jesus announced that He would not attend the upcoming Feast of Booths (Tabernacles), or Sukkot, the Jewish Festival which follows Yom Kippur, the day of atonement, which was the holiest day of the year. Jesus’ initial reluctance to attend the Feast, and ultimate decision to attend, has great significance, both for our understanding of the sixth sign and for Jesus’ future second coming.

As you may recall, Rosh Hashanah, the Jewish new year, marks a new beginning. The Jews believe that on this day the fate of each person for the upcoming year is written by YHWH in theBook of Life. The days (approximately 9) between Rosh Hashanah and Yom Kippur, known as the the days of awe, are spent in deep reflection, fasting, and prayer. It is a time of confession and repentance, it is a time of recognition that we are but dust, yet infinitely precious in YHWH’s sight.

The Jews believe that the fate which is written on Rosh Hashanah is then sealed by YHWH on Yom Kippur, at which point the Feast of Booths begins. It is our speculation that Jesus made the decision to ultimately attend the Feast of Booths to symbolically seal His fate. He would give His life for humanity on the upcoming Passover.

Yom Kippur is regarded as the Sabbath of Sabbaths, as such, it is only appropriate that the Jewish leaders who were looking for a reason to kill Him, would carefully observe Jesus in hopes of catching Him breaking their observance of the Sabbath.

As Rosh Hashanah begins, we hold fast to our faith, cleanse our minds and spirits, and resolve to love and forgive as God has loved and forgiven us.   May this year be filled with a generous portion of wisdom and perspective, and the faith and courage to use it to fulfill our calling.  The Messiah is coming, the trumpet is about to sound!

Is your lamp lit?

The New Labor Market – Scotland’s Lesson to Labor

9/19/2014 Portland, Oregon – Pop in your mints…

The results of the Scottish referendum on independence are in, and in the maneuvering leading up to the vote as well as the results themselves, the Scottish question has brought to light a new dynamic that many economists, including yours truly, have been late to properly identify:  The astronomical rise in the cost of labor that is on the horizon.

What do Scottish/English politics and the labor market have in common?  Nothing, really, save the dynamic between an overlord (England/Employer) and underling (Scotland/Employee), and the rapidly changing status quo.

First, a brief overview of the Scottish referendum from an economic standpoint. Astute readers will note that we have an extremely basic understanding this.  That said, the little we do understand serves our metaphor.  As such, we dare not risk deepening our understanding at this point.

Our aforementioned understanding is the following:  As part of the United Kingdom, Scotland enjoys a £32 Billion per year block grant, for which it cedes approximately £7 Billion per year in North Sea oil tax revenues, and approximately £16 Billion in other taxes rendered to England, bringing England’s net subsidy to Scotland to roughly £9 Billion per year.  You can read more about the economics of Scottish Independence at the ever Clairvoyant Market Oracle.

Scottish Independence YES Vote Panic

As you can see at the end of the above video, the chances of Scotland actually voting “Yea” for the referendum were extremely far-fetched and rightfully cause for panic.  Furthermore, we observe that the reaction of the English, predictably, was to cave to Scottish demands for autonomy and, ultimately, an increase in the net subsidy in exchange for remaining part of the UK.

As the Scottish economy represents roughly £160 billion annually, it is clear that the £9 billion hit in terms of the subsidy loss would be devastating.  Devastating as it may have been for the Scottish people, the loss was at least calculable and to some extent containable.

On the other hand, while England appears to have forfeited a good deal of autonomy, not to mention being out a net £9 billion on the Scottish subsidy, their zeal to keep Scotland in the UK is explained by one simple fact:

Scotland is irreplaceable, and for England to forfeit its allegiance now is not only to turn its back on a union forged over the course of 300 years, it is to look forward to a future of Balkanization and an incalculable demise in its political and economic power as the sun finally sets on an Empire that at one time could rightfully claim that the sun never set upon it.

Do you now see how the metaphor applies to the labor market fellow taxpayer?  In simple terms, Employee (Scotland) threatens to leave Employer.  Employer reacts by giving employee more autonomy and pay.

This scenario is playing out across certain cross sections of the US Labor market and is about to have a tremendously disruptive effect on what many have come to understand to be the status quo in terms of Corporate employment.

While it may be true that, unlike Scotland, most employees are replaceable, it is also true that with each employee that walks out the door, an incalculable amount of synergies and institutional knowledge leaves with them.  Couple this loss of intangibles with the fact that the employee that will be hired to replace them is likely to be 1) More expensive, 2) Less productive, and 3) Less loyal than the one that just walked out the door.

Like Scotland, many employees are finding that, while they have something to lose by leaving their employer, the loss is calculable and often more than compensated for by the potential gains awaiting them as the current game of musical chairs disrupts the low cost of labor, a hidden subsidy that many corporations have come to rely on.

While it may appear that employees, like Scotland, have much to lose and little to gain by declaring their independence and seeking new alliances, in reality it is the corporate status quo, such as England, that stand to lose the most in this latest game of musical chairs.

In the end, England will pay dearly for maintaining its alliance with Scotland.  Will your employer pay dearly for you?  You may be surprised by the answer.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Key Indicators for September 19, 2014

Copper Price per Lb: $3.13
Oil Price per Barrel (WTI):  $92.41

Corn Price per Bushel:  $3.31
10 Yr US Treasury Bond:  2.58%
Bitcoin price in US: $396.09
FED Target Rate:  0.09%
Gold Price Per Ounce:  $1,216

MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  6.2%
Inflation Rate (CPI):  0.2%
Dow Jones Industrial Average:  17,279
M1 Monetary Base:  $2,747,800,000,000

M2 Monetary Base:  $11,479,800,000,000

In Honor of Leo Tolstoy

9/9/2014 Portland, Oregon – Pop in your mints…

Today in 1828, Lev Nikolayevich Tolstoy, or Leo Tolstoy, as most have come to know the Russian writer, was born in Yasnaya Polyana, a few hundred miles south of Moscow.

The Kingdom of God is Within You
“The Kingdom of God is Within You”

While Tolstoy is best know for works such as War and Peace and Anna Karenina, it is important to note that Tolstoy’s later works on Christian Anarchist thought and non-violence (specifically, what is refered to as “peaceful non-resistance”) had a profound impact on Martin Luther King, Jr. and had a direct impact on Mahatma Ghandi.

"L.N.Tolstoy Prokudin-Gorsky" by Sergey Prokudin-Gorsky - Журнал "Записки Русского технического общества", №8, 1908. Стр. 369. URL: http://prokudin-gorsky.org/arcs.php?lang=ru&photos_id=818&type=1. Licensed under Public domain via Wikimedia Commons - http://commons.wikimedia.org/wiki/File:L.N.Tolstoy_Prokudin-Gorsky.jpg#mediaviewer/File:L.N.Tolstoy_Prokudin-Gorsky.jpg
“L.N.Tolstoy Prokudin-Gorsky” by Sergey Prokudin-Gorsky – Журнал “Записки Русского технического общества”, №8, 1908. Стр. 369. URL: http://prokudin-gorsky.org/arcs.php?lang=ru&photos_id=818&type=1. Licensed under Public domain via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:L.N.Tolstoy_Prokudin-Gorsky.jpg#mediaviewer/File:L.N.Tolstoy_Prokudin-Gorsky.jpg

For anyone who is interested in truly achieving peace, his work The Kingdom of God is Within You is a must read.

Tolstoy’s influences included Victor Hugo, George Fox, William Penn.

In honor of Leo Tolstoy, we present links to our own works which have been inspired by Leo Tolstoy, whom Ghandi referred to as:

The greatest apostle of non-violence that the present age has produced

On the nature of Empire, Part II: The better way

The Catechism of Non-Resistance: Required reading for all human beings

What is Truth?  On the Nature of Empire

Atheism with Regards to Government

Join us in honoring Tolstoy and all of the peacemakers on this earth, for now, more than ever, our voices are needed! Go forth, and love your neighbor as you love yourself

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Fresh ideas on Economics, Monetary Theory, Politics, and Less Pressing but Equally Entertaining Matters for the English and Spanish speaking worlds

%d bloggers like this: