10-15-21 Squid Game: Gold and Global Real Estate Debt

Strong indices thanks to the banking, energy, and industrial sectors, the dollar has performed strongly against the yen especially, leaving Oceania with a green taste in its mouth, increases in the value of oil have helped these currencies and the Canadian dollar to correct its price. Gold despite rallying has corrected sharply in price due to market insecurities, although it is not far away from starting to reflect its true price. Cryptos have been on a meteoric rise following the approval of ETFs by the SEC.

A week with strong rises in the indices with the EUROSTOXX50 closing at 4,182.91 points, DAX closing at 15,587.36 points, and FTSE100 closing at 7,234.03 leading the rises in Europe. And with the S&P500 closing at 4,471.37 points, DOW JONES closing at 35,294.76 points, and NASDAQ 100 closing at 15,146.92 points. HANG SENG closing at 25,330.96 points, ASX200 closing at 7,362.00 points and NIFTY 50 closing at 18,338.55 points, and NIKKEI225 closing at 29,180 points. Banks and energy leading the indexes rises.

(investing) Goldman Sachs Group (NYSE: GS) has issued a quarterly earnings report in profit causing its shares to climb 3.8% and giving the Dow its biggest boost, followed by Bank of America (NYSE: BAC) and others this week. It was banking that caused the S&P500 to turn green in Friday's session, sending the banking index up 2.1%. Alcoa, the aluminum maker, jumped 10% during the middle of the U.S. session following its announcement of its return to dividend issuance from 2016. A week littered with releases related to the industrial and aerospace sector. The energy, financial and industrial sectors have been the main drivers of gains this week on all stock market fronts.

(Reuter) China will launch Saturday the Tianhe rocket with three astronauts to begin construction of a module of the future Chinese space station, in a journey that will last six months in space. The longest period in orbit for a Chinese expedition. On the same day, NASA will launch the first mission of its kind, with the Lucy spacecraft, to explore "the Trojans", thousands of rocky objects orbiting the sun in two masses, one in front of the gas giant and the other behind Jupiter. The spacecraft takes its name from the fossil Lucy landed in Ethiopia in 1974, which gave its name to the Beatles song "Lucy in the Sky with Diamonds". According to the route plan, Lucy will study for three laps around the outer system and circling the earth by circling the sun at different points.

(Reuters) The Central Bank of China said that the financial problem of Evergrande can be controlled and does not present serious risks to the Chinese financial sector, because most of the Asian country's real estate developers are in good economic conditions, and the BCC is in a position to support the giant to complete their ongoing projects.

(EFE) Currencies this week have had a bullish behavior in the Euro, the pound and the dollar due to the economic results of the eurozone and business strength have made the ECB set the reference exchange rate at 1.1602 which has pushed the price of the euro against the dollar, added to the Empire State index in New York with poor results in October for the United States. The University of Michigan's consumer index also pointed to a rise in prices, as did the yield on the US Treasury's 10-year bond, which has pushed the EUR higher, making the currency more attractive. The ECB's expansive monetary policy is holding back the euro's appreciation. Lagarde believes that this rise is temporary.

The unemployment rate and US Non-Farm Payrolls have affected the stock market results as well, sending the EURUSD bearish. Compared to the initial push of the day. EURJPY, GBPUSD, USDJPY, NZDUSD, AUDUSD, EURUSD, USDCAD have finished the week higher, with EURGBP, USDBRL, and USDMXN down sharply. However, bond yields have declined, limiting the dollar's gains against the yen. The New Zealand and Canadian dollars have been the best performing currencies. Despite the rise in pandemic cases, risk appetite has pushed the NZDUSD to two-year highs this week. The USDCAD has seen a correction to a three-month high as oil prices have been the trigger for the correction. The Canadian PMI IVEY and Employability reports have been good enough for such a push. The Australian dollar has also seen one-month highs against the dollar. The pound sterling rallied against the dollar, unlike the euro, which had to make a bullish turn after the ECB adjustments.

(investing) According to Tom Barklin, president of the Richmond Fed, the September guidance on reducing bond purchases is justified because "it was the advance notice they had promised. Japan's inflationary problem is at its highest in 13 years, putting a squeeze on manufacturers, who are already suffering supply shortages, which is aggravating domestic consumption. The Yen's lack of strength is due to the vicious cycle of inflation Car sales from companies like Hyundai and Ford have been the ones that have given the signal of possible declines in sales, despite the good results of September.

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Gold this week has had a rally that has slowed on Friday following a spike in U.S. bond yields and September retail sales (Reuters). XAUUSD fell 1.5% to $1,75.38 an ounce on inflation news and market uncertainty on Wednesday. It topped $1,800 on Thursday and has closed the week with an adjustment to $1,768.20 on the back of higher bond yields, and bet by billionaires like Soros on Bitcoin. Poor man's gold this week has shined showing data only seen in May. XAGUSD has reached the $23.63 an ounce range, its highest since mid-September, and closed the week at $23.285. One would think that silver is showing a mix of simultaneous euphoria and despair on its monthly chart, as according to Fibonacci levels prices are confined between $21 and $24.80, and the 100-week simple moving average has marked $22.42, which could push it to new confluence levels. It is at the top of a channel which it may break to taste new prices, but if not, the correction will be in the direction of its mean.

(Macrotrends) If we analyze gold on a historical level to understand that long-term direction, it helps us to shed sense in that we are seeing that it is closer to the upside than the downside, and right now, it is a sideways momentum. If we take a logarithmic scale inflation adjustment to the historical level of gold we are at a time where the price is at +243% of the value from pre-1950 to today, where the price has been hovering around $2000 again with its last high being $2400, and at that time further appreciation was expected. Comparing it to indices like the Dow Jones, you could appreciate that gold, has some value concerning the stock market if we see that it makes moves where it periodically moves to the top and bottom of indices like Dow Jones, and now is a time of laterality because it is not excessively far from what can be considered its ceiling.

Comparatively speaking gold, silver, the Dow Jones index, and the S&P500, in inflationary periods, the metal beats both indices by far. So if we see that currently, the Fan Stocks, which weigh 25% of the entire S&P500 index are similar to gold and silver, which are slightly behind. Silver is currently one of the most undervalued assets. It may have a lot to say in the coming years, for different reasons.

Maybe it is not correct to compare an index with gold and silver, but well, we are comparing gold with the Usain Bolt of indices. Maybe if we compare it to the MSCI World stock market, which has appreciated 147% and gold has had a return of 6.45% nominal, and the stock market only 7%, and the comparison in terms of return is similar. Although in Risk-Reward it is easier to see that gold has more volatility. We are looking at a period in which there is more inflation and this equates them and makes it more interesting to buy gold, than stocks. If we compare silver we see that there is a structural ceiling and floor and it is preferable to own gold rather than silver, which as we mentioned, was tested in 202. In 1919,1968 and 1980 the floor was established. Both assets are at the same distance in their overbought or extreme sell-off levels in relative terms. It would be interesting to hold them interchangeably. Hence the issue of a utility arises.

Silver is likely to be used frequently in renewables and automobiles so silver has a stronger demand peruse than gold which is simply a haven asset more than anything else. Analyzing the FED Balance Sheet against GOLD shows that the FED is suffering from an incredible depreciation on the dollar and gold is holding it. We are experiencing an increase in the monetary base of the dollar against gold, this depreciates its value as a commodity. And after multiplying the monetary mass astronomically in a single year, the only thing it implies is that the USD, EUR, YEN, YUAN, GBP... in circulation are worthless and less. If this increases in this way, the monetary base of all of them depreciates simultaneously with a lower purchasing power of all of them. That is why consumer prices, etc. have risen. The number of banknotes needed to buy the same thing is infinitely higher through inflation in all markets. This has not yet generated the response from gold, but it will. The ratio of gold to the monetary base allows us to discover that we have gone from expensive money to cheap money. The ratio shows that gold is cheap and will seek equilibrium. Reputable economists say that the long-term potential with a money supply of 0.5 can revalue gold, as it has in the past decade, by 2,500%.

If we translate this to Gold versus real estate, in a ratio, the housing cost index tells us that it is the same as it was in 1890. That is, the price of a house in 1890 is the same as it is now. If we use banknotes, we use an infinitely larger amount than we use bullion. So there is a very high gap right now. A 1 million dollar or euro house may seem expensive now, but when our children's children are around, they may be paying 3 million. In other words, in 50 or 60 years the price can multiply in a scalar way. Just as it happened with the price of gasoline. Cash is worthless and less, being the effect of inflation because it is poorly measured and central banks do not want to measure it because it is a Benchmark that limits the performance of tremendously destructive policies MMT, ultra-expansive, negative rates that have been created in the last decade and break the free market. 70 years ago a house was bought for 70 thousand, and at the beginning of this year, it was bought for 330mil.

(The Guardian, BOK,) The South Korean series of Squid Game, a popular dystopian drama that pits debt-ridden contestants in a macabre, blood-spattered race for an unimaginably large cash prize. The truth is, what is presented as television fiction is a real situation. A large and growing number of ordinary South Koreans find themselves suffocated by debt, in a country where borrowing money is as easy as buying a cup of coffee. This dark drama presents us with the fact that South Korea's household debt has risen in recent years and now equals more than 100% of GDP, a level not seen in the rest of Asia. It is due to the wage gap between income and expenditure, rising youth unemployment, and property prices in the big cities that are beyond the means available to the average worker. The working class exceeds a contracted debt of 5% of GDP. Even if someone saved all the money they earned in a year, they would not be able to pay off the debt, and the number of people with this problem is increasing exponentially. This has caused the financial supervisory service to resolve to limit borrowing, according to Lee In-Cheol, executive director of the thinktank Real Good Economic Research Institute. This, although it may seem like a case localized to South Korea and an element of fiction, has happened all over the world. Thousands of people have found themselves doomed because the pandemic has impacted their lives significantly on an economic level. And if we add to this the increase in the cost of living that has been frantically transferred to the citizens, salaries, subsidies, and other forms of receiving income from pensioners to the working class, are not being able to cope with this process of economic expansion.

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Cryptocurrencies this week have seen euphoria following the SEC's approval of cryptocurrency ETFs. (Cointelegraph) Jack Dorsey via Square has released to the world his plan to create an open-source, decentralized, custom silicon-based Bitcoin mining system to generate a more resilient bitcoin network, thus securing the network in a more energy and security efficient way. Citizens of El Salvador have been selling their dollars for Bitcoin over this past week.?It has allowed bitcoin BTCUSD to climb to $60,300 during Friday's session, closing at $60,016. Privacy-focused altcoins have soared following news of bitcoin ETFs. ETHUSD has climbed to $3971 closing at $3809.29. It is perceived that more and more billionaires are opting for bitcoin as alternative haven security to gold, hence the problems with gold trying to scale its prices.

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Crude oil this week has maintained its advance yet another week in its bullish channel, posting new three year highs, with WTI (USOIL) breaking above $82 per barrel closing at $82.53 and Brent (UKOIL) breaking above the $85 per barrel level, closing at $84.84. This is due to Biden's green dream, something not so easy for practically any of the countries, not to say none of them. Spain has been buying coal to cover the lack of Algerian gas, India has been burning more coal than ever to cover the lack of crude oil and gas products. Rising gas and electricity prices support a scenario of higher crude oil prices in the coming months. The release of inventory data by the OECD and the International Energy Agency (IAE) estimates that the energy crisis will lead to an increase in oil demand of 500,000 barrels per day in the coming months.

?Happy Trading and Happy Friday!

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This article only expresses my opinion and under no circumstances represents an investment recommendation, but a purely educational document.

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