Feb 17, 2022Liked by Russell Clark

One other interesting relationship that I've been thinking about (might be a topic for a separate post) is the way that yen, Treasuries, and gold have stopped moving together. Assets that were all deflation, "risk-off" hedges for past 25 years are starting to go their own ways in last 12 months or so... fits in nicely with some of your broad views on changing structural relationship between inflation, wages, etc. Very hard to get a handle on inflection points that happen every 30-40 years but feels like we are living through one of those times

Expand full comment

Specifically as it relates to the China-Japan trade balance, is there much difference if taking the value-added trade balance, and does this economically skew the outcome?

Expand full comment

Do you mind expanding on the idea of "liquidity driven assets"?

1) how do you define or consider "liquidity"

2) what transmission do you see from a pullback in this "liquidity", is it only portfolio rebalancing or dcf repricing due to higher sov. rates? or is there some kind of general contraction in supply of general buying power?


Ive tried to capture it "liquidity" in this note, feel free to refer to that if you find any ideas useful


Expand full comment

Have noticed some of the same things on my end, but you tie it together much more thoughtfully. The yen has been acting very strangely over the past year. I would have expected more of a rally in the yen in Jan 2022 with sharp equity market weakness in U.S. markets but it didn't happen. Compare that to the last major bottom in the yen in August 2015 and it bounced sharply. The yen no longer feels like the same *yen* that's it's been for the last 25 years.

Expand full comment