Wikipedia defines the term Business Cycle (or economic cycle) as “economy wide fluctuations in production or economic activity over several months or years.” As evidenced by the front page of today’s WSJ, the Fed continues to discuss its intervention in the business cycle with the constant printing of money and artificial suppression of interest rates. This time, according to the article, by recycling interest income flows back into the purchases of new Treasuries and/or MBS in order to keep their balance sheet constant in value. The $ index is falling to the lowest since mid Apr and the 2 yr yield is at a new record low in response. But I digress. A Chinese newspaper is saying officials may raise reserve requirements again by Oct and the Shanghai index is down by 1.7%. Copper is lower too as the correlation in price action between the two has risen to 91% over the past few days.
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