Mish's Global Economic Trend Analysis

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Philly Fed Growth Trends Lower 4th Month: Prices, Shipments, Workweek Negative Posted: 19 Mar 2015 10:18 AM PDT As has been the case with nearly every economic report for months on end, the Philly Fed Consensus Estimate disappointed to the downside. Slow growth with weakness in orders is the common thread for both the Empire State report, released earlier this week, and now the Philly Fed where the general conditions index held little changed at 5.0 in March vs 5.2 in February. New orders, at 3.9, are not much above zero while unfilled orders are suddenly well below zero, at minus 13.8 in a sharp decline from February's plus 7.3. Weakness in orders points to softness in shipments, which are already below zero at minus 7.8, as well as softness in employment which is struggling to stay above zero at 3.5. Price data show contraction for both inputs, at minus 3.0, and finished goods, at minus 6.4. The early indications on March are not that positive in what would extend a series of weak months for the manufacturing sector, a sector that the FOMC noted yesterday is being hurt by weak exports tied to weak foreign demand and complicated by the strong dollar. Philly Fed Components Let's dive into the Philly Fed Report for some charts and tables. Shipments, unfilled orders, delivery times, inventories, prices paid, prices received, and average workweek are all negative. Prices Paid, Prices Received The Fed will be watching prices and will not like what they see. Bear in mind the Philly Fed is a diffusion index. Size of the company reporting does not matter, nor do amounts. For example, a small company reporting a small decline in prices counts as much as a large company reporting a big increase in price. That said, over time these things average out, and the collapse of all the subcomponents certainly looks ominous. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Cash Dinosaur: France Limits Cash Transactions to €1,000, Puts Restrictions on Gold; Bitcoin End Coming? Posted: 19 Mar 2015 12:23 AM PDT A few days ago I asked How Long Before Cash is Banned? My question was in reference to reader CNA (Cards Not Appreciated) who commented ... Hi Mish I've been in Italy for a month. It's quite amazing how many places ask you to pay cash. Even at hotels, they would like you to pay your €1000+ bills in cash. And people 'wonder' why these countries always get into trouble. CNA Cash Dinosaur My belief is that cash is going the way of the dinosaur. Just today we see another step in that direction. France to Limit Cash Transactions Via translation from El Economista, please consider France Limits Cash Payments to 1,000 Euros The French Government will limit cash payments to 1,000 euros, compared to 3,000 euros today, a move that will come into force in September to combat terrorist financing and money laundering, in an announcement from Finance Minister Michel Sapin. For non-residents (mainly tourists) the limit will drop from 15,000 to 10,000 euros. Also, starting next year, banks will have to notify authorities of any income or withdrawals of more than 10,000 euros per month. Restrictions apply to suitcases with money or goods of value like gold. Yesterday, Today, Tomorrow Yesterday the French cash limit was 3,000 euros. Today the cash limit is 1,000 euros. Tomorrow (not in the literal sense as timing is uncertain), cash transactions will be restricted to 100 euros, then banned altogether. The same applies everywhere, including the US. Candy Want to buy a candy bar? The government will want to know where the purchase was made, how much you paid, and where you got the money to buy the candy bar. Bitcoin End Coming? Digital currencies will soon be mandatory. I believe the only reason bitcoin has survived is the Fed wants to study digital currencies. When the Fed decides to go 100% digital (I have no timeframe in mind) bitcoin may very well go back to its initial roots: worthless. The primary user of bitcoin right now is Chinese money laundering. Disagree? Then please explain why 80% of Bitcoin Transaction Volume is Chinese. How long can that really last? Digital currencies are coming. Is bitcoin the answer? Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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