About Currency Currents

With Currency Currents, you can stay tuned-in to our current global-macro view and our analysis of key investment themes driving currency prices.

We consistently focus on the key asset classes responsible for the flow of global capital -- including equities, fixed income, commodities and, of course, currencies.

Nothing is off limits to us in this free-wheeling look at the markets. Some days you’ll receive ramblings on trading psychology, while other days we may take an academic approach in explaining esoteric economic issues. Ultimately we have one goal in mind: to help you get a handle on the key investment themes driving global capital flow. Because if you know where the money is going, it increases the probability that your position in the market will be a profitable one.

Who is Jack the Pipper?

Jack Crooks is Black Swan Capital LLC, President and Chief Trading Officer.

Jack is founder and president of Black Swan Capital LLC. He has also operated a discretionary money management firm specializing in global stock, bond, and currency asset management for retail clients. In addition, he was general partner in a firm specializing in currency futures and commodities trading. Neither firm is now in operation.

Prior to entering the investment arena, Jack worked in various corporate finance positions. He has written extensively on the subject of global currencies and international economics.

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August 2009

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Picture Day

Posted 4 years ago | 9:22 AM | 21 Aug 2009

Quotable

“Idealism is the noble toga that political gentlemen drape over their will to power.”

Aldous Huxley

Key News/Picture Day

German services and French manufacturing unexpectedly expanded in August. (Bloomberg)

Oil touched a year-high above $73 a barrel. (Reuters)

Mexico's economy shrank 10.3 percent in the second quarter. (AP)

China plans to tighten capital requirements for banks. (Bloomberg)

Federal Reserve Chairman Ben Bernanke flooded it with trillions of dollars to save the banks and free up credit for consumers and businesses. Looming in the future is a high-risk challenge for the economy's rescuer-in-chief: He will have to mop up that money without disrupting a nascent recovery. (AP)

Zoom-zoom in the Monetary Base

...yet Commercial and Business loans have fallen....

S&P 500 divided by Gold…hmmm…it at least tells us the relative value of gold has risen dramatically compared to stocks, as we switched from the up with paper stock rally to the in with stuff commodities rally in 2000. And of course is the same image of the US dollar index over that time frame i.e. the bear market in the dollar (next chart)

Comp of S&P 500/Gold to US $ Index Weekly: Is SPU/Gold ratio leading the US$ Index? Was the risk bid rally in the US$ index an aberration, now on track to new lows as suggested by the SPU/Gold ratio? Or has the SPU/Gold ratio gone low enough? (see next chart below for the monthly view)

And last but not least…Inflation as measured by US CPI…2007 to 2008 was the first CPI year-over-year decline since 1954. How will “stuff” i.e. gold do in a deflationary environment? The deflation future may of course assume all the money in the monetary base chart above that has yet to make it to the real economy i.e. a decline in non-financial lending, doesn’t come rushing in.

The dollar is getting hit again this morning on the better than expected European Services news…commodity currencies up now, after being off overnight on China concern in the Asian session. High volatility in a narrow range for the currencies still makes this market a “dealers’ delight” as they know what the order book looks like.

A dollar index breakout, one way or another should be extremely powerful… The last one, or seemingly last one analyzed in real time proved to be another major head fake.