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Where To See Trends In Money

Follow the money. This simple adage reduces the noise of financial commentary & polical fads.

Main Economic Drivers​

People working is good for spending. High interest rates cool both inflation & risk taking. Political stability is necessary for economic growth.

Interest Rates (Bond Yields)​

Government bonds signal investor confidence. High bond prices means lower interest for bond holders. Low interest in 10 year government bonds are good for the real estate (commercial & residential) sector, as it is heavily tied to mortgage rates.

High interest rates discourage borrowers from taking risks, which usually affects employment numbers because the cost of expansion is slightly magnified.

Job Numbers​

Rising unemployment is bad for the economy because of less people spending money and fear of further job cuts.

Market Insights​

Copper to Gold Ratio​

This is a known indicator for the health of the business cycle. Gold is a defensive asset used to hedge market turmoil, whereas Copper is used in many manufacturing processes. Trending lower and bottoming, the downturn could be near.

Oil Prices​

High energy prices lead to increased prices. Increased prices leads to less spending.

Other Market Data​

Helpful data points:

  • Commoditites: Gold price (higher means investors are defensive)
  • Money markets: Short term debt
  • Derivative Markets: Futures contracts & Options may create a gravity to a desired point
  • Real estate: new buildings lead to higher employment

Trapped Capital​

Money in certain structures like pension funds or sovereign wealth funds usually can only invest in a very strict limited set of assets. When new assets and/or securities are created, some capital can be freed and the flow into these increases as confidence grows over time.