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  • Analyze this: The Fed is not printing enough money!

    Alexander Gloy

    Before you trash me in the comments, hear me out. It started off with Ray Dalio’s “beautiful deleveraging”, which inspired this post. Since the financial crisis, the Fed has increased its balance sheet from $900 billion to $2.9 trillion (red line in below chart). The difference is $2 trillion (or 13% of GDP). When the…

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  • Market risk factors

    Alexander Gloy

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  • All roads lead to a disintegration of the Euro

    Alexander Gloy

    Our investment thesis can be summarized as follows: Equities are worthless when associated debt becomes encumbered (risk capital takes the  first loss). Equity is not an asset; it is merely the remainder that is left over once debt is subtracted from assets. Recent GDP growth was possible only thanks to massive deficit spending and monetary…

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  • David versus Goliath – the SNB against everybody else

    Alexander Gloy

    A picture says more than a hundred words, so I wanted to present in graphical terms what happened at the Swiss National Bank over the last few quarters. Unfortunately, the SNB does not provide foreign currency positions including derivatives on an absolute basis, but here are the unhedged figures:   The SNB increased FX positions…

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  • Mental contortions of a printing machine operator

    Alexander Gloy

    “We never pre-commit” is the standard answer the ECB (European Central Bank) has for anyone asking about future interest rates (journalists regularly waste one of their two permitted questions at ECB press conferences). Why should central bankers not indicate future interest rates decisions? Because market participants will price that information accordingly, so the announcement would…

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  • “Nobody understands debt (but me)”

    Alexander Gloy

    Luckily they are easy to spot: the demagogues, the manipulators and the hired claqueurs. Unfortunately, there is no lack of media willing to provide a platform to perform their insidious game. Take Nobel-prize wielding economist Paul Krugman. In an article for the New York Times (“Nobody understands debt”) from January 1, 2012, he writes: “Through…

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  • Inside Job at the SNB?

    Alexander Gloy

    The official version: “Enormously dedicated” SNB chairman Philipp Hildebrand purchases 500,000 USD days before he devalues the Swiss Franc by 10%. This plain-vanilla spot currency transaction becomes “water cooler” story at Bank Sarasin (which wouldn’t even open accounts below 1 million minimum deposit). An IT employee takes pictures of incriminating documents, briefly weighs the consequences…

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  • Sales of gold and silver coins soaring at the US Mint?

    Alexander Gloy

    An article by Bloomberg “Gold Traders Most Bullish After Bear Market Averted” grabbed my attention; not because of the headline, but what was buried in the text: “The US Mint sold 45,500 ounces of American Eagle gold coins this month, compared with 65,500 ounces in the whole of December and 41,000 in November, its website showed.”…

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  • The 2-product, 2-customer wonder called Australia

    Alexander Gloy

    Australia is the sixth-largest country (2.9m square miles) on earth, just a tad smaller than the contiguous United States (3.1m). They are a little short on people (22.8m), which comes handy, since they dig up their entire country and sell the dirt to China. Australia has a remarkably low government debt-to-GDP ratio (29% ), low unemployment…

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  • The ghost of the Bundesbank haunting the halls of Brussels

    Alexander Gloy

    In his book “More money than God”, Sebastian Mallaby describes how George Soros received a signal from Helmut Schlesinger (president of Bundesbank at that time), to go ahead and speculate on a devaluation of the Italian Lira and the British Pound. Germany had enjoyed a boost from the integration of Eastern Germany, which, partially due…

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