"With the IMF cutting its global growth forecasts and signs of slowing evident
in the dramatic contraction in World Trade Volume in the last
few months, it is perhaps no surprise that the central banks of the world have
embarked upon what Goldman Sachs calls an 'Unprecedented Alignment of
Monetary Policy Across Countries'. Our earlier
discussion of the European event risk vs global growth expectations dilemma
along with last
night's comments on the impact of tightening lending standards around the
world also confirms that this policy globalization is still going strong and is
likely to continue as gaming out the situation (as Goldman has done) left
optimal CB strategy as one-in-all-in with no benefit to any from
migrating away from the equilibrium of 'we all print together'. Perhaps
gold (and silver's) move today (and for the last few months) reflects this sad
reality that all your fiat money are belong to us, as nominal prices
rise (but underperform PMs) in equities (and risky sovereigns and
financials).
While the 25 year low in Baltic Dry is explained away by the simple over-supply of ships (as if that is a good thing) with little thought as to the near-record high inventories of Iron Ore and so on around the world, the reality as shown above is a world in which trade volumes are down dramatically. The 3 month rate of change has turned negative and that trend is accelerating as the 6 month average is about to turn negative - a very weak signal.
Goldman Sachs:- The 'Globalization' Of Monetary Policy
While the 25 year low in Baltic Dry is explained away by the simple over-supply of ships (as if that is a good thing) with little thought as to the near-record high inventories of Iron Ore and so on around the world, the reality as shown above is a world in which trade volumes are down dramatically. The 3 month rate of change has turned negative and that trend is accelerating as the 6 month average is about to turn negative - a very weak signal.
Goldman Sachs:- The 'Globalization' Of Monetary Policy
- In this daily, we draw attention to the intensification of monetary policy coordination around the world.
- We show that the magnitude of policy synchronization has been unprecedented since the financial crisis...
- ...and it is still going strong in spite of some divergence across and within EM and DM central banks..."
