We continue to believe that eventual ECB policy normalization will lead to a much larger appreciation of the Euro than most observers expect. However, specific developments will certainly delay this process, so we think it is a good time to dig deeper into our position.

According to the Federal Deposit Insurance Corporation (FDIC), the aggregate net income of the banks for the quarter ending on 31st Dec 2018 amounted to US$59.1 billion, an increase of US$33.8 billion or 133.4% from the same quarter in 2017. More than 70% of the 5,406 insured institutions that posted the financial results reported year-on-year growth in quarterly earnings. After adjustments for tax reform (to reflect the average effective tax rate before the 2017 tax law) the net income would have been $50.3 billion in 4Q 2018.

We read with interest Goldman’s Sach’s commodity downgrade which argues that for commodities to continue to perform well, there will have to be improved fundamentals. We decided to test their claim ourselves by estimating the historical relationship between several commodities and economic fundamentals including measures of U.S. and Chinese economic strength, the strength of the dollar, and interest rates.

Product Introduction

Veritaseum sells gold stable-tokens (VeGLD) that are 100% backed by physical gold - insured and stored in a LMBA Vault. These tokens are redeemable worldwide for physical gold by the token-holder (owner) upon demand or may be sold back to Veritaseum in lieu of redemption.

Gold has significant stable store of value and inflation protection benefits that can be referenced here.

Veritaseum offers additional products and services that enables gold token-holders to generate income returns on their gold via P2P gold lending products. One such lending product is the gold-denominated hard money loan. A hard money loan is simply a short-term loan secured by real estate.

Veritaseum is a not a party to the transaction between Lender and Borrower and does not have an economic interest in the loan. Veritaseum provides the financial products, expertise, and the technology infrastructure that enable the automatic facilitation, management, and enforcement of the terms and conditions agreed to by the Borrower and Lender per the smart contract deployed on the Ethereum Network.

See video of the product at work here..

Rising Rig Counts Do Not Predict Changes to Crude Oil Prices. Since December 2018, both crude oil prices and the number of active rigs as reported by Baker Hughes have risen. It is well known that these variables are highly correlated with each other so their recent co-movement is not surprising. Little research, however, tries to untangle the less obvious causal relationships between these variables and the little that we have seen yields mixed results. We thus set up our own model to see if news about rig counts is helpful for forecasting oil prices. We find that it is not. Rig counts predict neither oil prices nor economic growth, and a forecaster can safely ignore them.